Asian stock markets fell Friday, unnerved by a ratcheting up of global political tensions after a Malaysian jetliner was shot down over Ukraine and Israel launched a ground offensive in the Gaza Strip.
Oil, meanwhile, has risen more than 2 percent in 24 hours following the announcement of fresh U.S. sanctions against Russia for what Washington says is its support of separatist rebels in eastern Ukraine.
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Tokyo's Nikkei 225, the regional benchmark, tumbled 1.2 percent to 15,184.36 and Hong Kong's Hang Seng slipped 0.4 percent to 23,423.41. South Korea's Kospi was down 0.2 percent at 2,016.48.
Stocks in Taiwan and Australian also were lower, as were most markets in Southeast Asia. China's Shanghai Composite inched up 0.4 percent to 2,160.17.
Malaysia's benchmark stock index was down 0.4 percent to 1,876.21 after news that a Malaysian Airlines jetliner had been shot down over conflict-wracked Ukraine with 298 people aboard. Shares of Malaysia Airlines plummeted 11 percent.
Ukraine accused pro-Russian separatists of shooting down Malaysia Airlines Flight 17, sharply escalating the crisis and threatening to draw both East and West deeper into the conflict. The rebels denied downing the aircraft.
"While initial trader reaction has been to sell first and ask questions later, the more considered approach will involve waiting for further insight into the likelihood of this tragic event triggering an escalation of the situation in Ukraine," said Ric Spooner, chief market analyst at CMC.
It was the second disaster involving the Malaysian flag carrier this year. On March 8, a Malaysia Airlines Flight 370 vanished about an hour after taking off from Kuala Lumpur, spawning an international mystery that remains unsolved.
The shooting down of the Boeing 777 roiled markets worldwide, with Israel's launching of a ground invasion into Gaza adding to uncertainty.
Thousands of Israeli soldiers entered the territory late Thursday, escalating a 10-day campaign of heavy air bombardments to try to destroy Hamas' rocket-firing abilities.
In Europe, Britain's FTSE 100 closed down 0.7 percent at 6,738.32 on Thursday while Germany's DAX fell 1.1 percent to 9,753.88. The CAC-40 in France ended 1.2 percent lower at 4,316.88.
Russia's MICEX index fell by 3.8 percent, a day after the latest round of U.S. sanctions, which targeted two major energy firms, a pair of powerful financial institutions, eight weapons firms and four individuals. The U.S. penalties are meant to increase pressure to end the insurgency in eastern Ukraine believed to be supported by Moscow.
In the U.S., the Dow Jones industrial average closed down 0.9 percent at 16,976.81 and the broader S&P 500 index fell 1.2 percent to 1,958.12.
Oil prices continued to shoot up Friday over fears that new U.S. sanctions on Russia might affect supplies.
Benchmark U.S. crude for August delivery was up 56 cents to $103.75 in electronic trading on the New York Mercantile Exchange. The contract rose $1.99 the day before to close at $103.19.
In currencies, the euro rose to $1.3522 from $1.3516 late Thursday. The dollar rose to 101.32 yen from 101.21 yen.