Thai shares extended their declines on Tuesday because of intensifying tension between Russia and the West as well as surging local Covid-19 cases.
Russia's official recognition of the independence of the two separatist regions in Ukraine put pressure on global stocks and pushed the global gold price past US$1,900 an ounce, while the crude oil price stayed above $90 per barrel on Tuesday.
Investors also shifted from high-risk assets such as stocks to low-risk assets such as fixed deposit and funds in the money market.
Dow Jones futures continued to fall, while the Dow plummeted more than 500 points on Tuesday morning.
Komsorn Prakobpol, head of the strategy unit at Tisco ESU, said the conflict could lead to retaliation from the West, led by the US and the EU.
Russia, the world's second largest crude oil producer after Saudi Arabia, is a major exporter of natural gas to Europe.
The risk of war means a threat to the global energy supply, which the market is watching closely, he said.
However, Tisco ESU expects the Russia-Ukraine conflict to have a limited impact on global crude supply for two reasons.
First, Europe is facing severe energy shortages, meaning sanctions on energy imports from Russia are unlikely. Second, previous sanctions on energy imports had a limited impact on Russian crude production.
In 2014, the US and Europe imposed sanctions on Russian energy companies in response to the invasion of Crimea, but the measures only resulted in a slight decrease in Russian crude production.
The country's oil production also recovered to a level higher than before the sanctions within a month after the sanctions were imposed because Russia has several sales markets.
Mr Komsorn said the US will likely lift sanctions on Iran thanks to progress in their negotiations on a nuclear deal.
The US has more incentive to complete the negotiations to reduce energy prices and solve inflation problems, he said.
If the talks between the US and Iran are successful, Tisco ESU expects Iran to increase its oil output by at least 1 million barrels per day. This could cause the crude oil price to trade in the range of $85-90 per barrel.
Kampon Adireksombat, Siam Commercial Bank's chief investment officer, said although the likelihood of a full-scale war is relatively low, the tension could be prolonged.
There may be a short-term impact from likely economic sanctions on the Russian financial markets, said Mr Kampon.
In addition to the geopolitical conflict, the Thai stock market has been pressured by rising Covid-19 infections that could undermine the country's reopening and economic recovery. The SET index plunged and has stayed below 1,700 points so far this week.
The gold spot price stood above $1,900 an ounce as of 3.40pm on Tuesday, while the crude oil price was $92 per barrel.