The assassination of Pakistan's former Prime Minister Benazir Bhutto has sent stock markets falling and boosted prices for oil and gold.
Benazir Bhutto was killed in a suicide attack in Rawalpindi
The main index on the New York Stock Exchange fell 192 points or 1.4% while prices of government bonds rose.
There are concerns that the economy of Pakistan could be unsettled by the assassination, and that the problems may spread to other nations.
The Karachi Stock Exchange has been closed for three days of mourning.
"This is absolute disaster for Pakistan," said Max King from Investec Asset Management.
"Pakistan is clearly turning into one of the failed states in Asia."
It has been a strong few years for the key Karachi Stock Exchange index, the KSE100.
When there was a failed attack on Ms Bhutto in October, the market initially fell but recovered to end the day higher.
Similarly, when a state of emergency was declared on 3 November, the market fell about 10%, but then regained most of its losses.
The worry for many analysts is that the unrest in Pakistan could have knock-on effects elsewhere in the region.
"I suppose it could have an impact on India. She (Benazir Bhutto) is a politician who basically had the best attitude towards India," Mr King added.
Audrey Childe-Freeman, European economist at CIBC, said that: "Pakistan is a crucial country in the region and prospects for political uncertainty are leading to some nervousness."
Ms Childe-Freeman said that the uncertainty was being reflected by "gold, bond and oil prices rising, and the US dollar dipping".
Political upheaval tends to raise gold and bond prices as people move money into relatively safe investments.
Fears about unrest in the region also have a direct effect on oil prices, because Pakistan is an important ally of the West.
"It highlights the long-term geopolitical issues we face with instability in that region with rising Islamic fervour, which ultimately threatens the oil-producing areas," said Jim Awad from WP Stewart Asset Management.
"The most direct effect is the terror premium on the price of oil," he added.
US light, sweet crude for February delivery rose 65 cents to $96.62 a barrel on the New York Mercantile Exchange, having earlier climbed as high as $97.79.
At the same time, gold rose to as much as $830.05 an ounce, which was its highest price since 26 November. Its price had already risen 30% this year, amid concern about the state of global markets.
There was concern that market reaction could be even greater because trading is notoriously thin between Christmas and New Year, so effects tend to be amplified.
But some analysts say the assassination was not unexpected.
"I think this is anticipated. It is well within what we expected might happen," said Jennifer Harbison, head of the Asia desk at Control Risks.
"We have known since her arrival back in Pakistan she was in danger, so I don't think this changes our fundamental risk assessment."
Others suggest that there are so many economic issues for investors to digest that they have less time to worry about political events.
Geopolitical risks are always something that can add to where the market is going if the market doesn't have more important subjects to jump on," said Willem Sels, credit strategist at Dresdner Kleinwort.
"I think we have enough on our minds in the credit markets and the liquidity crunch that this will remain more important than geopolitical risks."