Investors flee risk assets as geopolitical tensions flare in N. Korea, Middle East

Asian stocks fell on Tuesday as the political tinderbox in the Middle East and the Korean Peninsula added to uncertainty over the looming French vote, pushing nervous investors into safer assets such as the yen and US Treasuries.

MSCI’s broadest index of Asia- Pacific shares outside Japan dropped 0.3 percent.

“Most Asian markets could be seen with moderate changes this morning amid a mixed trend,” said Pan Jingyi, market strategist at IG in Singapore. “Price movements here appear to be largely mirroring those in the US, with key corporate earnings due later in the week and could be the reason that investors are still holding onto equities.”

The heightened geopolitical risks come at a time when the global economy has shown steady improvement, led by the US and encouraging momentum in export- reliant Asia.

Tokyo’s Nikkei closed 0.3 percent lower, dragged down by a stronger yen. Toshiba Corp was among the biggest de- cliners, ending the day 2.7 percent lower, with the conglomerate expected to file its twice- delayed earnings results on Tuesday, without a full sign- off by auditors.

Australian stocks reversed earlier losses to climb 0.3 percent, after a measure of business conditions hit the highest level in a decade. They earlier hit their highest level since April 2015 for the second session in a row.

The Australian dollar was flat at $ 0.7501, paring earlier gains.

Overnight, Wall Street ended a chop- py session little changed, weighed down by nervousness about quarterly corporate earnings later this week.

The depressed sentiment pulled 10year US Treasury yields down to 2.3427 percent on Tuesday from Monday’s 2.361 percent close.