The Australian share market closed lower on Friday, snapping a three-week winning streak as escalating tensions in the Middle East drove investors away from equities.
The S&P/ASX 200 index fell by 55.2 points, or 0.7%, to 8150 points, resulting in a weekly loss of 0.8%, the first since early September. Nine of the 11 ASX sectors ended the session in the red.
Investor sentiment was rattled after US President Joe Biden hinted at a potential retaliatory strike by Israel on Iranian oil assets, driving oil prices up by over 5%. The surge in oil prices boosted the energy sector, which climbed 1.8% for the day.
Among the energy stocks, Woodside rose by 2.2% to $26.64, while Santos gained 2.1% to $7.30. Smaller players also saw gains, with Horizon Oil jumping 7.5% to 21¢ and Strike Energy rising 9.5% to 23¢. Karoon Energy and petrol retailer Viva Energy also benefited, increasing 2.2% to $1.65 and 3.1% to $3.02, respectively.
The mining sector, which had surged the previous week due to China's renewed stimulus efforts, saw losses as momentum waned. BHP dropped 1.7% to $44.58, and Rio Tinto fell 1.9% to $3.02.
The banking sector also took a hit, with Commonwealth Bank slipping 1.4% to $132.74 and Westpac down 1.9% to $30.14.
On the bond markets, 10-year rates were at 4.055% and 2-year rates were at 3.671%.