Weakness in ASX 200 Persists for 3rd Session

The S&P/ASX 200 was down 60 points, or 0.7%, to close at 8,456 on Monday, marking a third straight decline amid broad-based losses, led by logistics, producer manufacturing, financials, and healthcare. Sentiment remained downbeat on growing fears that Australia’s economic outlook has shifted materially amid renewed Middle East conflict, with higher energy prices expected to fuel inflation, slow growth, and lift unemployment. Adding pressure, LNG production stayed offline, and thousands were still without power in the northwest part of Australia, over a week after severe storms, Reuters reported. In the U.S., rate expectations flipped, with markets now pricing 12bps of Fed tightening this year versus 50bps of cuts a month ago. Four major banks slipped between 1.7% to 3.8%. Meanwhile, Wisetech Global (-4.9%), Pro Medicus (-2.7%), and Qantas (-1.9%) led other decliners. Traders now await upcoming releases, including RBA minutes, U.S. NFP data, and global PMIs, all due later this week.

Australian shares dropped 82 points, or 1.0%, to 8,434 in early Monday trade, marking a third straight decline as risk sentiment weakened. The drop tracked softer U.S. futures, with the Iran war entering its fifth week and raising concerns over broader economic fallout, particularly via higher energy costs. Also, caution mounted ahead of key U.S. NFP data this week, alongside global manufacturing and services PMI figures. Economists expect these readings to show a slowdown in March, reflecting high energy prices linked to the conflict. Meanwhile, the OECD last week warned that Australia could face one of the highest inflation rates among advanced economies. Major players in the transport sector, including Uber and Qantas, are announcing price hikes, local media said. Losses were broad-based, led by consumer, industrial services, logistics, and financial stocks. Notable decliners included Wisetech Global (-5.5%), Xero (-4.7%), Mineral Resources (-2.9%), and Ramsay Health Care (-2.2%).

The S&P/ASX 200 edged down on Friday, finishing at 8,516 and marking the second straight session of losses as fears of a prolonged energy shock from the Middle East war drove borrowing costs higher. President Trump warned Iran must strike a deal with the U.S. or face continued military pressure, adding that seizing control of Iran’s oil remained on the table. Separately, the OECD warned Australia could face one of the highest inflation rates among advanced economies and severe fertiliser supply disruptions amid geopolitical risks. RBA also cautioned that the longer the conflict drags on, the greater the strain on households and businesses. Genesis Minerals (-4.2%), Greatland Resources (-4.0%), Macquarie Group (-2.3%), and Qantas Airways (-1.1%) led declines. Still, the market gained 1.0% for the week, its first rise in four, buoyed by bargain hunting and news that Trump will meet Chinese leader Xi Jinping in Beijing on May 14–15, a summit rescheduled from March 31.