The explosion – many assume shooting down – of Malaysia Airlines passenger flight MH17 which has killed 295 people over the disputed region in Eastern Ukraine has roiled markets overnight. Stocks and the Aussie dollar are down, gold up, and bond markets are rallying strongly.
Rumours from the ground in Ukraine are that the plane was shot down by a ground-to-air missile. Additionally this morning, news broke that Israel has launched a ground offensive into Gaza.
This combination of events has caused a risk-off event in markets and at the close the Dow is down 0.94% or 161 points to 16,977, the S&P 500 lost 1.19% or 24 points to 1,958 and gold is up $20 ounce to $1,318.
Oil has jumped $1.84 bbl to $103.04.
But the biggest move has been in the safe haven of bond markets, with US 10-year Treasuries rallying 7 points to 2.46% for a new 2014 low. Bonds in Europe and on the SFE here in Australia have also rallied.
Locally, the SPI 200 September contract on the SFE is down 20 points to 5462 bid while the Aussie dollar has fallen since the announcement of the Israeli ground offensive and is currently at 0.9354.