Asian shares skid as Obama authorizes air strikes in Iraq

Thu Aug 7, 2014 11:25pm EDT
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By Lisa Twaronite

TOKYO (Reuters) - Asian shares tumbled on Friday as investors sought out safe-haven assets on growing fears that conflicts in Ukraine and the Middle East could sap global growth, extending losses after U.S. President Obama said he had authorized air strikes in Iraq.

Better-than-expected export growth from China pulled markets off their lows, but failed to offset all the gloom.

Obama said in an address that he authorized targeted strikes to protect the besieged Yazidi minority and U.S. personnel in Iraq, after the Iraqi government requested help.

U.N. Secretary-General Ban Ki-moon and the United Nations Security Council on Thursday called for the international community to help Iraq's government and people as the country struggles against a sweeping advance by Islamist militants.

MSCI's broadest index of Asia-Pacific shares outside Japan was off its lows but still dropped about 0.8 percent, on track for a weekly loss, while Japan's Nikkei stock average plunged about 3 percent.

U.S. crude, meanwhile, soared more than a $1 to $98.45 a barrel, after closing at its the weakest level since February on Wednesday. It was last up about 1 percent at $98.26.

"In the big scheme of things the moves feel overdone, but that's because volatility has been so low recently. Everyone said the volatility couldn't stay so low, that something would change it. This seems to be the event," said Richard Grace, chief currency and rates strategist at Commonwealth Bank of Australia.

S&P 500 e-mini futures slipped 0.5 percent, which could portend a downbeat day on Wall Street. On Thursday, U.S> shares ended down, erasing early gains marked on data showing the number of Americans filing new claims for unemployment benefits unexpectedly fell last week. [.N]   Continued...

Pedestrians walk past an electronic board showing the various stock prices outside a brokerage in Tokyo August 6, 2014.  REUTERS/Yuya Shino