ASX 200 Slides to Six-Week Low as Oil Breaches $100 on Middle East Flare-Up
Australian shares fell to a six-week low, with all sectors in the red, as Middle East shipping attacks pushed oil above $100 a barrel and lifted rate-hike expectations.
Australian equities tumbled to their weakest level in six weeks on Thursday, with every sector trading in negative territory, after fresh attacks on shipping in the Middle East drove crude prices past the $100-a-barrel mark and revived inflation fears.
The S&P/ASX 200 index stood at 8,785.20 as of 0020 GMT, down 1.4%, having closed at its lowest since July 27 in the previous session.
Risk appetite weakened globally after Iran and the United States struck tankers, the largest wave of attacks on shipping since the war began, raising the prospect of deeper disruption to energy flows from the Gulf.
The oil spike has begun to show up in Australian consumer prices, most visibly in a stronger-than-expected monthly inflation print that has bolstered expectations of a fourth interest rate increase this year. Market pricing points to a 77.3% probability of a quarter-point rise in the cash rate at the Reserve Bank of Australia's meeting later this month.
Financials dropped 1.3% to their lowest since mid-June, with all four major banks shedding between 1.3% and 1.8%. The lenders have signalled that elevated interest rates and recent tax changes are weighing on home-loan application volumes.
Rate-sensitive segments added to the broader decline, with real estate and consumer discretionary stocks down 1.3% and 0.9% respectively.
The mining sub-index fell 2.2% to a three-week low, as shares of BHP, Rio Tinto and Fortescue each touched roughly one-week lows. Among gold miners, Northern Star Resources lost 1% and Evolution Mining 1.6%.
Energy stocks slipped 0.3% despite the rally in crude, dragged by a 0.3% decline in index heavyweight Woodside Energy. The sub-index has nonetheless added about 3.3% this week.
Healthcare stocks shed 0.8%, while the industrials sub-index gave up 1%.
Across the Tasman, New Zealand's benchmark S&P/NZX 50 index eased 0.4% to a one-week low of 13,760.36.