United States President Donald Trump's decision to launch a missile strike on Syria sent shockwaves through financial markets, affecting commodities, currencies and stocks.
Crude oil jumped to its highest in a month and safe havens like gold also rallied, but stock markets and the US dollar slumped.
Mr James Audiss, a Sydney-based senior wealth manager at Shaw and Partners, told Bloomberg that the missile strike, the first military action by the Trump administration, was a good excuse for market players who had been looking for a reason to sell. "The uncertainty that surrounds this gives them a definite cause to do that, and there is absolute spillover into the South Korean market because of the North Korean situation," he noted.
The South Korean won and shares on the Seoul stock market fell to their lowest levels in more than three weeks, although they pared their losses as the trading day progressed. The won was 0.1 per cent weaker against the US dollar, while South Korean shares closed 0.1 per cent lower.
It was a similar scenario across the region, with Asian markets opening with big declines, but later regaining ground. Some even ended the day slightly higher.
Singapore closed 1.68 points, or 0.05 per cent, higher at 3,177.27.
Tokyo gained 0.36 per cent and Shanghai added 0.2 per cent, while Sydney fell 0.1 per cent and Hong Kong slipped 0.03 per cent.
Julius Baer's chief investment officer for Asia, Mr Bhaskar Laxminaryan, said he thought the markets were actually "well-behaved" in the light of the news.
"The market is still more focused on fundamentals and the economic environment and on these two fronts, things have not changed. Investors likely saw the missile attack as a one-off event, and the correction was half-hearted," he added.
On the flip side, commodities had a field day, with gold rising as much as 1.4 per cent to US$1,269.53 an ounce, the highest since Nov 9, the day after Mr Trump was elected. Crude oil climbed 1.7 per cent to US$52.57 a barrel.
The US dollar, however, took a beating, weakening against the Japanese yen and other major rivals.
Some analysts noted that the missile strike was read by investors as a further sign that Mr Trump cannot keep up with his election promises. On the campaign trail, he had criticised former US presidents for being drawn into Middle East conflicts.
Mr Ariel Bezalel, head of strategy of fixed income at Jupiter Asset Management, summed up this scepticism in a research note yesterday.
"Firstly, we think it is highly unlikely that his trillion-dollar infrastructure spending plan will successfully pass through Congress without being watered down. There are also indications that his tax reforms will be pushed back to next year," he wrote. "In addition, we have noticed that lending standards at banks in the US appear to be tightening, leading to slower loan growth, which represents another potential risk for growth prospects."