Australian Stocks Extend Losses

The S&P/ASX 200 slid 1.7% to below 8,920 in early Wednesday trading, extending the previous session’s losses as concerns over the inflationary impact of the Middle East conflict weighed on sentiment, while investors awaited key domestic growth figures. The downturn mirrored a broader global selloff, with escalating tensions driving oil prices higher and fueling fresh inflation worries. Gold names led the retreat, down 6.6%, after bullion prices pulled back on a firmer US dollar. Gold producers Northern Star Resources and Evolution Mining dropped 6.7% and 6.3%, respectively, dragging the broader mining sector 3.9% lower. Investors now look to the Q4 GDP release after recent trade data showed net exports were less of a drag and public spending provided a stronger lift. Meanwhile, RBA Governor Michele Bullock signaled the central bank could still tighten policy as soon as March if inflation expectations risk becoming unanchored.

The S&P/ASX 200 slipped 1.3% to close at 9,077 on Tuesday, retreating from a record high reached in the previous session as investors weighed the latest remarks from RBA Governor Michele Bullock. She said the central bank’s March policy meeting would be “live” for a potential rate increase, marking a notable shift from her recent emphasis on patience. Bullock also cautioned that a potential oil price shock linked to escalating tensions involving Iran could reignite domestic inflation pressures. Market pricing now implies roughly a 28% probability of a 25bps rate hike at the upcoming meeting, with investors fully pricing in further tightening by May and assigning around a 75% chance that the cash rate will rise to 4.35% by year-end. Mining heavyweights led the declines, with BHP Group, Rio Tinto, and Fortescue sliding between 2.4% and 4.5%. In contrast, energy stocks outperformed, with Woodside Energy, Santos, Ampol, and Whitehaven Coal rising between 0.8% and 3.2%.

The S&P/ASX 200 closed flat at 9,201 on Monday, regaining record highs after earlier losses as investors flocked to gold and oil stocks amid geopolitical uncertainty. Markets reacted to US and Israeli strikes on Iran over the weekend, following Tehran’s refusal to curb its nuclear program. Tensions escalated after reports suggested the attacks killed Supreme Leader Ayatollah Ali Khamenei, prompting fears of regional retaliation. Oil stocks Woodside Energy climbed 6.8% and Santos surged 6.7%, while gold producers Newmont Corporation up 5.7%, Northern Star Resources gaining 4.8%, and Evolution Mining adding 6.6%. Meanwhile, investors digested recently released economic data. Australia’s Monthly Inflation Gauge, compiled by the Melbourne Institute, fell 0.2% month-on-month in February, reversing a 0.2% rise in January and marking the first decline since August. Additionally, ANZ-Indeed Australian Job Ads rose 3.2% in January, easing from a revised 5.2% gain in December.