Oil prices rose more than one percent Wednesday, extending the previous day's rally, and haven gold pushed towards a record high after Iran's missile attack on Israel ramped up fears about an escalation in the Middle East.

News of the launch rattled US and European traders and sparked a sell-off on most markets, though Asia fared slightly better, with Hong Kong resuming its China stimulus-fuelled rally as it reopened after a one-day break.

Both main crude contracts jumped more than five percent at one point Tuesday after Iran fired dozens of missiles at Israel.

Tehran threatened to hit all Israeli infrastructure if attacked.

"The burning question is whether Iran's missile strike is a one-off response or the start of something much bigger. Most bets lean towards the former, especially with the US stepping in to back Israel," said independent analyst Stephen Innes.

"Iran's oil infrastructure could very well be in their crosshairs. And let's be real-taking a swing at Iran's oil lifeline could have far-reaching economic consequences, sparking a severe escalation," Innes wrote in his The Dark Side Of The Boom newsletter.

Demand for gold -- considered a go-to in times of uncertainty and turmoil -- pushed the precious metal close to its $2,685 record.

All three main indexes on Wall Street ended in the red, with the Nasdaq down more than one percent. But Asia fared better. Hong Kong soared more than four percent -- passing 22,000 points for the first time since February last year -- as traders get back to buying up beaten-down stocks after China last week began unveiling a raft of economic stimulus measures.

The Hang Seng Index has rocketed more than 20 percent over the past seven trading sessions on optimism that Beijing will press on with its stimulus campaign. Markets were closed in Shanghai and Shenzhen for a week-long holiday, having also zoomed higher before the break. There were also gains in Sydney, Singapore and Wellington, though Seoul, Wellington and Jakarta slipped.

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