The Australian stock market remained largely flat this afternoon as investors weighed the potential impact of escalating tensions in the Middle East.
The S&P/ASX 200 index finished 0.1% higher at 8204, barely moving from yesterday's close as the energy sector's recent surge slowed.
In the previous session, a sharp rally in energy stocks — spurred by concerns over a potential broader conflict in the Middle East — balanced out losses in technology and consumer shares.
However, today, energy shares have retraced some of their gains, slipping 0.3%. Overnight, oil prices steadied following a surge as fighting intensified between Israel and Hezbollah in southern Lebanon, with both sides reporting casualties.
The ASX's sectors experienced minimal movement, with none recording more than a 1% change in either direction, echoing a quiet trading session mirrors Wall Street as investors look toward Friday's release of September jobs data, which could influence expectations on future interest rate cuts.
The Dow Jones, S&P 500, and Nasdaq all posted minor gains of less than 0.1%.
Meanwhile, real estate stocks have provided some relief to the market, staging a modest rally as interest rate-sensitive sectors rose by approximately 1%. Dexus led the charge, gaining 1.9%.
The gains in the real estate sector come as the International Monetary Fund (IMF) issued a warning to Australia's federal and state governments, cautioning that any unexpected increases in spending could compel the Reserve Bank of Australia to maintain high interest rates.
The IMF also advised that future cost-of-living support should be carefully targeted to avoid exacerbating inflationary pressures.
On the bond markets, 10-year and 2-year rates were at 3.999% and 3.616%, respectively.