Shares prices on the Australian Securities Exchange (ASX) are likely to keep falling when trading resumes on Friday as the United States’ war with Iran continues to rage, dragging American stocks to their lowest levels this year.
An 0.32% drop in the ASX 200 index is expected when the ASX opens at 10:00 am AEDT (11:00 pm GMT Thursday) with the March futures contract quoted 28.00 points below the previous settlement at 8,592 points.
Burrell Stockbroking wealth adviser, Adam Dight, said that although Australian stocks had fallen sharply over the last week, he had not seen it as a buying opportunity because there may be more selling to come.
“It’s still a falling knife,” he said.
The ASX 200 has lost 3.5% of its value over the last five days, outpacing the drops in the major U.S. benchmarks, which have fallen by 0.5% to 1.4%.
But with client portfolios well positioned for the eventual rebound, there was little to do as events in the Middle East, which were determining the direction of markets, were outside their control.
“We’ve just switched off. There’s no fundamentals to analyse,” Dight said.
“Everybody’s portfolios were flying high when we hit all time highs 15 days ago. We celebrated that and nothing has changed.”
The three main U.S. stock indexes slumped by at least 1.5% on Thursday (Friday AEDT) as crude oil prices climbed after Iranian strikes on oil tankers worsened inflation worries.
The Dow Jones Industrial Average dived 1.6%, the S&P 500 shed 1.5%, and the Nasdaq Composite lost 1.8%, taking them to lows not seen so far in 2026.
Oil prices jumped more than 9% after Iran vowed to keep the Strait of Hormuz shut and the International Energy Agency (IEA) warned the war was creating the largest-ever oil supply disruption.
"There’s a realisation that a resolution to the Middle East conflict is being pushed further out," Carson Group Chief Market Strategist Ryan Detrick was quoted as saying in a Reuters story.
"It’s a sell first, ask questions later type of mentality. There hasn't been safe sector outside of energy. "
The Australian market fell on Thursday with a rally in energy producer share prices the only highlight as the ASX 200 Index dropped 1.3% to finish at 8,629 points.
In fixed interest markets, the Australian Government bond yield curve tilted down as two year rates rose 0.40% to 4.519% and 10 year rates dropped 0.28% to 4.984%.
