The US-Iran tensions have forced investors, especially on Wall Street to rein in their optimism that had seen the inexorable rise of stocks.
There are concerns about the tensions spiralling out of control if there is a military response from Iran and the US feels that a response is required.
As oil prices have jumped by about 4 per cent with the price of a barrel at around $70, Treasury yields have fallen as investors tor to safer havens. Gold has reached a 7-year high because investors are turning to gold for safety due to the tensions. Spot gold was up 1.5 per cent rising to $1,579.55 per ounce. The Japanese yen is also on the rise as investors to the currency, which is seen as a safe haven during times of global crises because of the strong foreign assets position of Japan.
Asia Pacific markets were also not immune to the US-Iran crises in early trading as Japan's Nikkei fell by about 2 per cent, Hong Kong’s Hang Seng index was down 0.94 per cent, and shares in Australia also down by 0.4 per cent. Surprisingly, markets in mainland China were not affected by the contagion in the region as the Shanghai composite opened fractionally up, and the higher, the Shenzhen component and Shenzen composite were up 0.32 per cent and 0.17 per cent respectively.