In Asia, Malaysia Airlines closed down 11 percent after slumping as much as 15 percent at the open. Major indexes on the continent were mostly lower on Friday. On Wall Street, U.S. stocks tumbled on Thursday, with the Dow falling back below 17,000. The VIX (CBOE's Volatility Index) - a fear gauge in U.S. markets - also saw its largest intraday move since April last year on Thursday.
Emerging market currencies saw a brief blip on Thursday after the incident was first report. The Mexican peso, the Turkish lira, the South African rand and the Brazilian real all lost ground against the dollar, but managed to claw back losses by Friday morning. Traditional safe-haven trades like gold, U.S> Treasurys and the Japanese yen saw buying with fears that these geopolitical tensions may now escalate after the crash. Gold dipped slightly on Friday, trading at $1,313 per ounce as investors took some profit, although the precious metal remained supported on this latest round of risk aversion.
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Marshall Gittler, the head of global FX strategy at IronFX, told CNBC via email that asset markets were showing "textbook 'risk-off' behavior" and would concentrate on Friday's UN Security Council meeting for further news.
"I'd expect to see more mean reversion today as long as the situation in Ukraine doesn't escalate. In fact I wonder if this tragedy might be the trigger for a resolution of the Ukraine crisis – as long as the fighting was within Ukraine it could be ignored, but now that the rest of the world is dragged in, both sides may say 'enough'," he said.
Thin summer markets and a lengthy risk rally also accentuated Thursday's selloff, according to Kit Juckes, global head of foreign exchange strategy at Societe Generale. He added that the mood in markets on Friday morning was "pretty dire", but expected investors to start differentiating between assets and sectors.
"The pressure on Russia over the Ukraine conflict will increase and that region's assets will remain under pressure for a while. Yesterday's rate cut and protests against Israel across Turkey can add to risk aversion there. But beyond this week, MH17 will be seen as a human tragedy rather than a geopolitical crisis. I expect (emerging markets) to stabilize in the coming weeks - but today is clearly starting in a risk-averse mood," he told CNBC via email.