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Stocks in the developing world fell yesterday, as investors remained wary of riskier assets after Iran launched missiles at bases housing US forces in Iraq, while the South African rand reversed an initial drop to firm slightly.

Iran retaliated against the US drone strike that killed an Iranian commander late last week, an attack that stoked fears of an all-out conflict in the Middle East and set off a bout of risk aversion.

However, Iranian officials said Tehran did not want a war and its strikes “concluded” its response to the US air strike, helping settle down surges in oil and gold prices.

“There is a deterioration in risk appetite following Iran’s attack on the US base.

That said, the general consensus at the moment seems that this attack was calibrated to possibly limit the rise in tensions,” said William Jackson, chief emerging markets economist at Capital Economics in London.

“Comments from the Iranian officials seems like they were acting but without making things worse, which is also limiting the size of the fall we are seeing today.”  — Reuters.