Asian markets fell and oil prices extended gains Friday on worries that an expected ground invasion of Gaza by Israel will spark a wider conflict in the Middle East.
Risk aversion was compounded by Federal Reserve boss Jerome Powell, who indicated a pause in interest rates at the bank's next meeting but left open the prospect of another hike later.
Iran has warned it could be drawn into the conflict if Israel embarks on a land offensive, fanning fears that the region could be embroiled in a wider conflict, with several observers saying such a scenario is becoming increasingly likely. Meanwhile, traders are wrestling with the prospect that US interest rates will remain elevated for some time as the Fed battles to contain inflation.
"Inflation is still too high, and a few months of good data are only the beginning of what it will take to build confidence that inflation is moving down sustainably toward our goal," Powell told a conference in New York. The yield on the 10-year US Treasury note, seen as a proxy for US interest rates, rose above five percent for the first time since 2007.And Asia followed suit, with Tokyo, Hong Kong, Shanghai, Singapore, Taipei, Manila and Jakarta all in the red.Hong Kong - Hang Seng Index: DOWN 0.7 percent at 17,174.40Dollar/yen: UP at 149.87 yen from 149.81 yenWest Texas Intermediate: UP 1.0 percent at $89.26 per barrelNew York - Dow: DOWN 0.8 percent at 33,414.
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