Australian shares fall as Iran conflict dims outlook
The Australian stock market performed poorly in the final session of the week after US markets fell on weak chip stocks and escalating conflict in the Middle East.
The S&P/ASX200 fell 76 points at midday, down 0.86 percent to 8,764.7 points, while the All Ordinaries lost 83 points, or 0.92 percent, to 8,953.9 points.
The decline puts the top 200 on track for a 0.4 percent decline since Monday and marks the second week in a row of losses.
Kyle Rodda, senior market analyst at Capital.com, said geopolitical risk remains the biggest threat to markets as attacks between the US and Iran drag on.
“Both the United States and Iran continue to escalate tensions,” Rodda said.
“Risks to energy supplies have again moved beyond the Strait of Hormuz, with Iran instructing Houthi forces to close the Red Sea if the United States strikes Iran’s energy infrastructure.”
The ASX-listed energy sector rose 1.4 per cent, with Brent crude trading near US$85 per barrel, supported by strong performances from Woodside, Santos, Viva and Ampol.
Woodside shares rose nearly three per cent in early trading after Macquarie said the oil and gas giant remained an attractive candidate for a takeover by ExxonMobil.
Gold miners also sold off as the precious metal fell to US$3,985 ($A5,707) an ounce, while basic materials lost 3.1 per cent as BHP shares fell.
Regis Resources has come under particular selling pressure, falling nearly eight percent after a recent guidance update incorrectly reported more than 4,391 ounces of bullion on hand.
Major banks also remained sluggish as CommBank shares fell 1.3 percent to $170.95, but the financial sector continued its gains for a third week.
Coles has abandoned plans to buy pet care company Greencross from TPG Capital for about $4 billion, according to company news, sending the supermarket giant’s shares up 3.6 percent to $23.38.
The grocery retailer’s move helped the consumer staples sector rise 1.7 percent.
Zip Co fell more than five per cent after it said it would shut down its New Zealand operations as it plans to narrow its focus on its Australian and US businesses.
SkyCity Entertainment, which is also reducing its footprint in New Zealand, also traded higher after pegging the sale of two of its New Zealand-based commercial properties at NZ$74.5 million (AU$62.3 million).
BHP’s industrial relations troubles continued after hundreds of staff went on strike at Hedland Port on Thursday, with electrical workers voting for a walkout.
Mayne Pharma has appointed Griffin Buchanan as chief financial officer, effective in August.
The Australian dollar is buying 69.83 US cents at 70 US cents at 5pm on Thursday.
