Markets weaken after US fires missiles against Syria

The New Zealand sharemarket slipped and the Kiwi dollar fell after news that the United States had fired missiles into Syria, prompting investors to head towards so-called safe haven assets in the US and Japan.

The S&P/NZX 50 Index closed down 0.6 per cent yesterday at 7243.75 in a market that was already soft.

The United States attacked a Syrian Government air base with 50 to 60 cruise missiles in response to a chemical weapons attack it blamed on President Bashar Assad.

US officials said the Tomahawk missiles were fired from two warships in the Mediterranean Sea.

JBWere's chief investment officer Bernard Doyle said the market reaction so far had been measured.

People would be looking to see how the northern hemisphere markets reacted overnight but as it stood yesterday afternoon, Doyle said it was "pretty limited".

However, Doyle, noting the heightened tension between the US and North Korea, said market sentiment would quickly worsen if US President Donald Trump's talks with China's President Xi Jinping proved to be unsuccessful.

Mark Lister, head of private wealth research at Craigs Investment Partners, said the price action was a natural reaction to the events overseas.

"Risk sentiment has turned downward on the back of that," he said.

Lister expected the traditional safe-haven investments - Japanese yen, the US dollar, gold, and US Treasuries - to continue to be bought on the back of the news.

"That's a normal and expected reaction to something like this coming out of left field," Lister said.

"There is a flight-to-safety going on, with investors getting out of those high-risk asset classes and flocking to the safety of the yen and things like government bonds."

Shares from Tokyo to Sydney pared advances and gold prices also rose as news of the attack broke, Bloomberg reported.

Australia's stockmarket plunged sharply when the attack happened, eroding gains from early trading.

The S&P/ASX 200 was down 0.22 per cent late in the afternoon.

After tepid trading before the news, Brent crude futures , the international benchmark for oil, jumped to US$55.60 per barrel afterwards up US72c, or 1.3 per cent from the previous close.

US West Texas Intermediate (WTI) crude futures climbed US70c, or 1.4 per cent to US$52.40 a barrel.

In the United States, the key US 10-year bond yield, which moves inversely to prices, rallied down to 2.29 per cent from 2.35 per cent before the air strikes.

The NZ dollar fell from US69.75c to US69.62c after news of the attack broke, before recovering to be unchanged by late yesterday. The currency was faring better than the more actively traded Australian dollar, which dropped by a quarter of a US cent to US75.25c.

Gold jumped 0.8 per cent to US$1,261.09, following two days of declines, Bloomberg reported.

Westpac senior markets strategist Imre Speizer said the flight to safe haven assets was the "obvious reaction" to events in the Middle East.

With: AAP