Asian stock markets declined on Thursday as renewed fighting between the United States and Iran unsettled investors and triggered a broader shift toward safer assets. Although oil prices eased from recent highs following a ceasefire agreement between Israel and Lebanon, concerns about escalating regional tensions continued to weigh on global market sentiment.

Investors largely ignored stronger than expected US economic data, focusing instead on the potential impact of renewed hostilities in the Middle East on global growth, energy markets and financial stability.

MSCI’s broad index of Asia Pacific shares outside Japan fell 1.6 percent, reflecting widespread investor caution across the region.

Japan’s Nikkei 225 dropped 1.4 percent, while South Korean stocks reopened after a public holiday and fell as much as 2.6 percent. US stock futures also pointed lower, with S&P 500 futures declining 0.4 percent.

Market analysts said investors shifted back into a risk off mode as military tensions between Washington and Tehran intensified once again.