Investors have grown increasingly nervous over the possibility of more direct United States (US) military involvement as the Israel-Iran air war entered a sixth day, with President Donald Trump calling for Iran's unconditional surrender and warning US patience was wearing thin.

"Clearly the Middle East issues have not been solved, and comments by President Trump just mean that things could get more dangerous in that part of the world," said Joseph Capurso, Head of International and Sustainable Economics at Commonwealth Bank of Australia (CBA).

"The markets are trying to figure out that risk of a big US military intervention. It's hard to say exactly what the market is thinking, but judging by the oil price and currencies, they're certainly pricing in at least some risk that something goes very bad there," Capurso said.
Oil prices extended their climb on Wednesday, with Brent crude futures up 0.3% to $76.67 per barrel while US crude rose 0.43% to $75.16 a barrel. Both had jumped more than 4% in the previous session.

While the broad risk-off moves across markets from earlier in the week abated slightly, the overall mood remained downbeat.

--Reuters--