Key Takeaways
- Australian shares declined for a fourth consecutive session.
- Miners and banks were the main contributors to the losses.
- US President Trump's comments on Iran dampened risk sentiment.
Australian shares continued their downward trend, falling for a fourth straight session as of Thursday morning. The S&P/ASX 200 index dropped by 0.8% to close at 8,715 points by 00:05 GMT, marking its weakest performance in nearly three weeks.
The decline was primarily driven by heavyweights in the mining and banking sectors. Copper prices retreated, causing a significant drop of 1.8% for miners, which hit their lowest levels in almost three months. Notable losses were recorded for BHP and Rio Tinto, with respective declines of 1.7% and 3.9%. The relative strength index for Rio Tinto fell to 25.1, indicating oversold conditions.
Financial institutions also faced pressure, with the benchmark falling by 0.9% after reaching its highest point in about two months on Wednesday. Among the 'Big Four' banks, losses ranged between 0.6% and 1.7%. Healthcare stocks saw a 0.6% drop, marking their weakest session in nearly two weeks.
However, energy stocks provided some relief, advancing by almost 2% to reach their highest point in over two weeks. This was driven by an increase in oil prices, with Woodside Energy and Santos gaining 1.8% and 1.9%, respectively.
The International Monetary Fund's recent downgrade of Australia’s growth forecast for 2026 and warnings about the potential impact of Middle East conflicts on global growth further exacerbated investor sentiment. Additionally, US President Donald Trump's statement that he was not interested in further talks with Iran and his warning of possible additional strikes dampened hopes for a diplomatic resolution to regional tensions.
New Zealand’s market fared better, as its benchmark S&P/NZX 50 index rose by 0.1% to close at 13,681.04 after the central bank raised interest rates for the first time since mid-2023 and signalled further increases were likely.
Analysts suggest that ongoing Middle East tensions and geopolitical uncertainties continue to cast a shadow over global markets, particularly in sectors heavily reliant on commodity prices.
