Asian shares headed lower after Turkey downed a Russian fighter jet, raising oil prices and geopolitical tensions. Japan's Nikkei 225 dropped 0.5 percent to 19,831.66 at the open. Australia's ASX 200 and New Zealand's NZX 50 both declined almost 0.2 percent, with New Zealand ending a week-long run. Futures on Hong Kong's Hang Seng were also lower.
“A spreading and escalation in recent terror attacks and now the downing of a Russian warplane by Turkey are raising concerns of the possible unforeseen spillover impacts of Middle East conflicts,” ANZ Bank economist Con Williams said, as Bloomberg reported. “The accumulation of these events is now beginning to have an influence on global markets.”
The Asian decline contrasts with U.S. stock indexes, which rose, as a 2 percent rise in oil prices fueled energy stocks. Oil prices rose as the incident between Turkey and Russia raised concern of supply disruptions.
Turkey shot down the jet, saying it ignored warnings it was violating Turkish airspace. Russia said the plane was over Syria, where it was coming from a bombing run. The two countries were already at odds as Turkey alleged that Russia had previously violated its airspace and that Russia's attacks in Syria were hitting Turkmen, ethnic Turks in Syria, who are fighting Syrian President Bashar Assad, a Russian ally.