Asian stocks fall, oil extends gains on Middle East risks By Reuters

(Correct vice presidential debate for late Tuesday, not Wednesday, in last paragraph)

By Kevin Buckland

TOKYO (Reuters) – Asian shares sank on Wednesday, catching up with a sell-off on Wall Street, after Iran’s ballistic missile attack on Israel sparked fears of a wider regional conflict while raising the risk of disruption supply.

Investors turned to safer assets, pushing U.S. Treasury yields lower during Asian time, while gold neared an all-time high.

The haven dollar traded near its strongest in three weeks against the euro. Macroeconomics also supported the dollar, with a resilient US labor market arguing for a smaller interest rate cut at the Federal Reserve in November and inflation trends in the eurozone supporting European Central Bank easing this month.

it was down 1.5 percent at 0022 GMT, while South Korea fell 1.3 percent and Australia’s benchmark lost 0.3 percent.

MSCI’s broadest index of Asia-Pacific shares fell about 0.5 percent.

Hong Kong has not yet opened after a Tuesday holiday. Markets in mainland China are closed for the week-long Golden Week holiday. Trading in Taiwan was suspended due to a typhoon.

U.S. stock index futures eased 0.16 percent, after the cash index lost 0.9 percent overnight.

“In the chain of potential market volatility shocks, geopolitics will typically trump the economy, corporate earnings or central bank response – largely because most market players are weak to price risk around these events,” said Chris Weston, head of research at Pepperstone.

“While these events usually reconcile in a positive way to the market, the tail risk it can present is clearly significant,” Weston said. “The situation remains fluid, and the slightest easing or increased aggression in rhetoric from Israel or Iran could have a considerable impact on market sentiment.”

Iran said early Wednesday that its missile attack on Israel was over, barring further provocations, although Israel and the US vowed retaliation.

Futures gained more than 1 percent to $74.33 a barrel, extending Tuesday’s 2.5 percent advance. U.S. WTI futures gained 1.3 percent to $70.73 a barrel after rising 2.4 percent on Tuesday.

Gold fell 0.16 percent to $2,658.63 an ounce, after rising more than 1 percent in the previous session, which took it close to last month’s record high of $2,685.42.

Benchmark 10-year Treasury yields fell 1.5 basis points (bps) to 3.7278%.

which tracks the US currency against the euro and five other major rivals, was steady at 101.21 after rising to 101.39 on Tuesday for the first time since September 19.

Europe’s common currency was little changed at $1.1070 after a 0.6% drop in the previous session, when it fell to $1.1046 for the first time since September 12.

Eurozone data on Tuesday showed inflation fell below the ECB’s 2% target last month, bolstering bets for a quarter-point rate cut on October 17.

Meanwhile, overnight US figures showed a solid economy, a day after Fed Chairman Jerome Powell ruled out the likelihood of another 50 basis point interest rate cut at the US central bank’s meeting next month.

The number of job openings unexpectedly rose in August after two straight monthly declines, but hiring was weak and consistent with a slowdown in the labor market.

Private payrolls data is available later on Wednesday, ahead of the potentially crucial monthly non-farm payrolls figures on Friday.

U.S. politics will also be in the spotlight, with Democrat Tim Walz and Republican JD (NASDAQ: ) Vance going head-to-head in a vice presidential debate Tuesday night.