Asian markets fall after US authorises Iraq airstrikes

Investors are worried the escalating tension will hurt global growth. And they are also jittery about ongoing hostility between the west and Russia. Japan's benchmark Nikkei index fell by nearly 3% to close at 14,778 points, a two-month low. Stocks in Australia fell to a five-week low. The S&P ASX 200 index shed 1.3% to close at 5,435 points. Australia's Prime Minister Tony Abbott has dubbed Russia "a bully" and threatened stronger sanctions against the country, following Russia's ban on most Western food imports. Earlier this week, the Russian government halted the import of food and food products from the West, including the US, European Union and Australia. Russia's move is a retaliation against sanctions related to the crisis in Ukraine. But not every market in the region had a negative reaction to ongoing geopolitical tensions. China escaped the market falls, due to strong domestic factors. The latest trade data showed a 14.5% jump in exports for July, when compared to one year ago. The surge in exports is fuelling hopes that strong external demand will keep the Chinese economy on the growth track for the rest of the year.

The latest data puts China's trade surplus at a record $47.3bn (£28bn) for July.

The benchmark Shanghai Composite index was up by 0.2% to 2,193 points.

Just as the Asian markets started their trading sessions on Friday morning, US President Barack Obama announced he had authorised air strikes against Islamic militants in northern Iraq but would not send US troops back to the country.

He said Islamic State (IS) fighters would be targeted to prevent the slaughter of religious minorities or if they threaten US interests.

No strikes have been made yet but the US has made humanitarian air drops to Iraqis under threat from the militants.

IS has seized Qaraqosh, Iraq's biggest Christian town, forcing locals to flee.

The Sunni Muslim group, formerly known as Isis, has been gaining ground in northern Iraq since it launched its onslaught in June.

It now controls large swathes of Iraq and Syria and says it has created an Islamic caliphate in its territory.