Stocks, gold and oil whipsawed as Iran strikes pushes Mideast to brink

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Financial markets roil after Iran attacks US forces in Iraq leaving investors fearful of wider conflict.

Financial markets were roiled on Wednesday after Iran fired missiles at US forces in Iraq, sending Asian stocks and US Treasury yields sliding and sharply lifting oil prices as investors feared a wider conflict in the Middle East.

"We are getting exaggerated moves but that's of course volatility playing. Markets simply hate uncertainty. It's an old adage but it definitely holds true in the current situation - markets can price risks but they can't price uncertainty," said James McGlew, executive director of corporate stockbroking at Argonaut in Perth.

Japan's Nikkei was down 1.2 percent, also paring earlier losses of over 2 percent, while Australian shares clawed back from a more-than-one-percent drop to shed just 0.14 percent. US S&P500 e-mini stock futures, which had earlier dropped nearly 1.7 percent, were down 0.26 percent. The yield on benchmark 10-year US Treasury notes last stood at 1.7899 percent, down from a US close of 1.825 percent on Tuesday, but up from session lows. US 10-year Treasury futures had earlier peaked at their highest level since November, and were last up 0.24 percent.The yen, which had hit its strongest point against the greenback since October in morning trade, gave up nearly all its gains midday in Japan. The US currency was last down just 0.06 percent against the yen at 108.35.

Gold also fell below a key psychological level as initial fears eased. The precious metal was 1 percent higher on the spot market at US$1,590.21 per ounce, having earlier blasted through US$1,600. Analysts said markets will be closely watching for confirmation of any US casualties from Iran's strikes.

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