Australian shares drop to 10-month low as traders gauge Middle East jitters

AUSTRALIAN shares fell to a more than a 10-month low, with banks and heavyweight miners leading declines, as uncertainty over the Middle East conflict kept investors from making massive bets.

The S&P/ASX 200 index was down 1.7 per cent at 8,330 points, as of 0119 GMT, and dropped to its lowest point since May 15 earlier in the session. The benchmark closed 0.8 per cent lower on Friday.

The index hit a record high of 9,202.90 points on February 26 and has since shed around 9.8 per cent, putting it close to the 10 per cent drop typically used to define a market correction.

Escalating the three-week-old conflict, Iran said on Sunday it would strike the energy and water systems of its Gulf neighbours if US President Donald Trump carries out a threat to hit Iran’s electricity grid within 48 hours.

The threat of retaliatory strikes on vital Gulf infrastructure has heightened fears of supply disruptions and broader regional instability, impacting the domestic stock market.

Australian miners dropped nearly 4 per cent to their lowest point since Dec 2, dragged lower by softer aluminium and copper prices. Additionally, weaker bullion prices also pressured the sub-index further.

Mining majors Rio Tinto and BHP Group lost as much as 2.6 per cent and 2.8 per cent, respectively, to their lowest levels since Jan 12.

Gold sub-index dropped as much as 8.1 per cent hit a six-month low.

Financials fell 1.3 per cent, hitting a two-week low, as losses in the “Big Four” banks, down between 1.5 per cent and 2.3 per cent, dragged the sub-index lower.

SEE ALSO

STI closes 2.2% down as Asia markets drop on Trump, Iran threats; gold wipes out gains this year

Japan’s Nikkei, bonds hit multi-month lows on war-driven inflation fears

Local tech stocks mirrored movements in their US peers, losing as much as 3.3 per cent to their lowest point since late October 2023.

Defying the trend, energy stocks gained as much as 0.9 per cent to their highest level since early February 2024.

Major energy producers Santos and Woodside Energy advanced 1.4 per cent and 1.5 per cent, respectively.

Locally, investors also await the February inflation data, due later in the week, to seek clarity on the central bank’s interest rate policy.

Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 index fell 1.2 per cent to 12,839.30 points. REUTERS