The Australian sharemarket retreated sharply on Tuesday, pulling back from record highs as escalating conflict in the Middle East drove oil prices higher and reignited concerns over global inflation pressures.
The S&P/ASX 200 fell 123.6 points, or 1.3%, to 9,077.3, with 10 of the 11 sectors finishing lower.
The index had closed at a record high of 9,202.90 on Monday.
Investor sentiment was weighed down by renewed fears of supply disruption after Iran threatened a full closure of the Strait of Hormuz, a critical artery for global oil shipments.
Consumer discretionary stocks led the declines, with Wesfarmers falling 3.6%, Aristocrat Leisure down 2.5%, Eagers Automotive falling 5.6%, and JB Hi-Fi down 3.2%.
Gold miners, which had rallied strongly on Monday amid a surge in bullion prices, reversed course.
Newmont dropped 2%, Northern Star fell 3.2%, and Evolution Mining slid 4.5%.
The major diversified miners delivered a negative performance, with BHP down 2.6%, Rio Tinto falling 2.4%, and Fortescue Metals off by 4.5%.
The Energy sector was the only bright spot on the market amid elevated crude oil prices. Woodside added 0.8%, Santos gained 1%, and Ampol ended 3.2% higher.
Coal producers also gained after prices jumped following Qatar’s shutdown of its largest liquefied natural gas plant.
New Hope rallied 7.4%, Yancoal gained 4.9% and Whitehaven Coal advanced 3.2%.
Qantas declined for a second consecutive session amid ongoing flight disruptions across the Middle East. Shares fell 1.8% even as UAE carriers Etihad Airways and Emirates resumed a limited number of services overnight.
The Australian real estate investment trust (A-REIT) sector also traded lower, with Goodman Group down 2.4%, Charter Hall falling 2.2%, and Mirvac declining 1.5%. Stockland retreated 2.2% after finalising documentation for a 50/50 partnership with EdgeConneX to develop, own and operate a portfolio of data centres across Australia.
In company news, Magellan Financial Group surged 21.9% after completing a $130 million institutional placement. The firm issued 15.4 million shares at $8.45 each to help fund its proposed merger with Barrenjoey.
Meanwhile, family tracking app Life360 fell 17.6% despite reporting an annual net profit of US$150.83 million (A$212 million), exceeding analyst expectations.
On the bond markets, the Australian 10-year yield rose 0.8% to 4.773%, while the two-year yield climbed 1% to 4.299%.
