Australian shares slump as Middle East tensions rise
Australia’s stock market headed lower after oil prices rebounded after Iranian officials threatened to abandon US peace talks if Israeli attacks on Lebanon continued.
The S&P/ASX200 fell 81.9 points at midday trading on Tuesday, falling 0.94 percent to 8,647.5 points, while the overall All Ordinaries index fell 83.9 points, or 0.87 percent, to 8,891.9 points.
The decline came after crude oil rose nearly 6 percent overnight following rising tensions in the Middle East.
“The news raised concerns that the conflict could expand, raising fears of possible disruptions to energy supplies, thus causing oil prices to rise,” said Chris Strazzeri, trading manager at Moomoo.
Local energy stocks rose 0.9 percent, with Brent crude hovering around $95 a barrel and Woodside, Santos and coal miners advancing.
The ASX-listed technology sector is on the rise for a second day, rising 2.4 per cent after Wall Street’s tech-heavy Nasdaq index posted another record close overnight.
Financials, which lost 1.5 percent of their value in the red sea that engulfed major banks, insurers and investment firms, weighed heavily on the stock market.
Basic materials fell 0.2 per cent as gold miners fell and the precious metal fell to US$4,484 ($A3,854) an ounce.
Northern Star was one of the few gold producers to improve, rising by more than a tenth after hedge fund and shareholder Elliott Investment Management called for an urgent strategic review.
Major miners BHP and Rio Tinto rose as copper prices appreciated, providing some offset to overall market weakness.
Real estate trusts, healthcare, consumer discretionary stocks and utilities also fell sharply as risk sentiment continued to worsen.
Going forward, eToro chief analyst Josh Gilbert said investors would closely watch Wednesday’s quarterly economic growth data to gauge Australia’s performance under the combined weight of the rate hike cycle, energy price shock and weakening in consumer confidence.
“February’s rate hike and the conflict in the Middle East certainly accelerated the slowdown, but it started well before any of those factors occurred,” Mr. Gilbert said.
“The RBA’s (central bank) problem now is that, despite three interest rate hikes in a row, inflation is not getting back to where it needs to be.”
Wesfarmers shares fell 1.7 percent to $78.42 after it announced it would move its industrial and security businesses Blackwoods and Workwear Group into its Bunnings business, according to company news.
Imaging company 4DMedical has gained almost two per cent after launching a clinical evidence program designed to accelerate its entry into the US$2.5 billion ($3.5 billion) acute pulmonary embolism market.
Meanwhile, Nine Entertainment has completed the transformation of its two regional TV assets, NBN (Northern NSW) and Nine Darwin, into new owners WIN Network.
The Australian dollar was buying 71.56 US cents at 70.83 US cents at 5pm on Monday.
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