Australian Shares Retreat on Geopolitical Tensions

The S&P/ASX 200 fell 0.5% to 9,158 on Monday, retreating from record highs as global risk sentiment deteriorated amid escalating tensions in the Middle East. Geopolitical risks escalated after US and Israeli strikes on Iran over the weekend, following Tehran’s refusal to curb its nuclear program. Iran retaliated after the attacks reportedly killed Supreme Leader Ayatollah Ali Khamenei. Domestically, the manufacturing PMI was revised down to 51.0 in February 2026 from a preliminary reading of 51.5, marking the lowest level in four months and easing from 52.3 in January. Banking stocks led the declines, with Commonwealth Bank of Australia, National Australia Bank, Westpac Banking Corporation, and ANZ Group Holdings falling 2.7%–3.3%. In contrast, Woodside Energy and Santos jumped 5.7% and 6.4%, while gold miners Newmont Corporation, Northern Star Resources, and Evolution Mining rose between 4.8% and 6.4% on higher commodity prices.

The S&P/ASX 200 rose 0.3% to close at 9,199 on Friday, stretching its record run to three sessions, as strength in miners outweighed declines in banks and consumer staples. The benchmark index also climbed 3.7% for the month, its strongest February since 2019, after solid corporate results helped investors shrug off a rate hike from the Reserve Bank and firmer-than-expected inflation data. Miners jumped 1.1%, buoyed by a 2% advance in gold producers as firm commodity prices and strong earnings from base and critical minerals companies pushed the sector to four record highs this month. Separately, Block Inc.’s Australian-listed shares surged nearly 28% after the payments firm unveiled plans to slash its workforce as part of an AI-focused overhaul. On the downside, financials eased 0.2%, while consumer staples underperformed, dragged lower by a 7.4% slump in Coles Group after it reported weaker half-year profit amid intensifying competition with Woolworths Group.

The S&P/ASX 200 opened largely unchanged around 9,170 in Friday morning trade, halting its two-session record run, as losses in miners and energy firms weighed. Mining giants BHP Group and Rio Tinto led the declines, down 0.6% and 1%, respectively, while energy stocks edged lower as oil prices steadied amid caution over extended US-Iran nuclear talks. Oil and gas producers Woodside Energy fell 0.7%, while its peer Santos dropped 0.8%. Rate-sensitive sectors, such as banks and real estate stocks, also remained under pressure as tightening policy risks mounted. In contrast, gold miners supported the market, up nearly 3% to a one-month high, with Northern Star and Evolution Mining climbing 2.5% each, while Newmont added 1.7%. Technology stocks were mostly higher despite a pullback from Wall Street peers. Meanwhile, an Australian trade union has requested urgent talks with WiseTech Global after the company announced plans to cut about 2,000 jobs under a two-year AI-driven restructuring.