The Australian sharemarket closed lower on Monday, with losses in the Technology and Financials sectors stocks outweighing gains in Energy and Materials, as escalating tensions in the Middle East weighed on investor sentiment.
The S&P/ASX 200 fell 55.3 points, or 0.7%, to finish at 8,461.0, with seven of the 11 sectors ending the session in negative territory.
Market sentiment was dented by a further escalation in the Iran conflict over the weekend, after Yemen’s Iran-backed Houthi forces launched missile strikes against Israel.
Fears of a broader conflict were also fuelled by an increased United States military presence in the region. U.S. President Donald Trump added to the uncertainty with comments suggesting a willingness to target Iran’s oil assets.
The geopolitical backdrop drove a sharp rise in oil prices, with Brent crude climbing 2.3% to $115.13 per barrel.
Technology stocks led the declines, with Life360 down 6%, Xero falling 3.2%, WiseTech Global shedding 4.8%, and TechnologyOne finishing 3% lower.
Financial stocks also came under pressure, with the big four banks recording notable losses. Commonwealth Bank fell 2.8%, National Australia Bank dropped 1.8%, Westpac declined 4.1%, and ANZ lost 1.6%, as investors rotated away from rate-sensitive sectors.
In contrast, energy shares provided some support to the index, buoyed by the rally in crude prices. Santos, Woodside Energy and Beach Energy rose 1.3%, 2.2% and 2.0%, respectively.
The Albanese government also announced a temporary reduction in fuel excise for the next three months, aimed at easing cost pressures on consumers amid rising petrol prices.
Mining stocks helped limit the broader market decline after aluminium prices surged following reports of damage to Middle Eastern production facilities.
Alcoa jumped 8.6%, South32 gained 9.4%, while major diversified miners also gained. BHP ticked up 0.1%, Rio Tinto advanced 4.9% and Fortescue added 1.8%.
In company-specific news, Greatland Resources surged 8.4% after announcing a 150% increase in its Telfer gold resource to 8 million ounces.
Webjet rose 1% after the online travel group confirmed its chief executive, Katrina Barry, would step down after less than two years in the role.
On the bond markets, yields moved lower, with the 10-year government bond yield falling 1.2% to 5.074% and the 2-year yield declining 2.1% to 4.717%.
