Australia Shares Fall for Fifth Session to Kick off Week

Australian equities dropped 52 points or 0.6% to 8,734 in early deals on Monday, extending losses for the fifth straight session and lingering at a two-week low amid a retreat in U.S. stock futures following renewed diplomatic setbacks between Washington and Tehran. U.S. President Donald Trump on Saturday scrapped plans to send U.S. envoys to Islamabad, Pakistan, for negotiations with Iran, despite Iran's foreign minister pressing ahead with visits to intermediary nations. Traders stayed cautious ahead of March inflation data due later this week. In February, Australia's CPI stood at 3.7% yoy, still above the RBA’s 2–3% target, underscoring persistent price pressures since H2 2025. Sector weakness was broad, led by energy minerals, logistics, and healthcare, though gains in non-energy minerals helped cap declines. Among major laggards were Lynas Rare Earths Ltd. (-2.9%), Mineral Resources (-2.3%), and Yancoal Australia (-1.1%). The four big banks slipped between 0.7% to 1.1%.

The S&P/ASX 200 edged lower on Friday, closing at 8,786 and marking a fourth straight session of losses. Sentiment was weighed down by weaker U.S. stock futures, as uncertainty over the reopening of the Strait of Hormuz and stalled U.S.–Iran peace talks dampened risk appetite. Momentum in Australian stocks remained fragile, with the benchmark index down 1.8% for the week, marking the steepest weekly decline since mid-March. Renewed inflation pressures, reemerging since H2 of 2025 and already above the Reserve Bank of Australia target, continued to rattle equity markets. This reinforced views that the central bank could deliver another rate hike at its May meeting, with March inflation data, due next week, likely to be pivotal. Commercial services, logistics, and consumer durables drove the weakness, with notable decliners including Fortescue (-5.7%), Northern Star Resources (-3.5%), Pro Medicus (-2.3%), and SGH Ltd (-2.2%). Meanwhile, the four major banks delivered a mixed performance.

Australian shares fell 37 points, or 0.4%, to 8,756 in Friday morning trade, marking a fourth straight decline and tracking Wall Street’s Thursday losses as hopes for a swift resolution to the Middle East war faded. Tehran vowed to keep the Strait of Hormuz closed as long as U.S. port blockades remain, intensifying geopolitical strain. For the week, the local market is down around 2% so far, set for a second consecutive weekly loss. Inflation pressures, already above the Reserve Bank’s target before hostilities in Iran erupted, have reinforced expectations of further rate hikes at the May meeting, with March inflation data due next week in focus. Sector losses were broad, led by commercial services, financials, and non-energy minerals. Fortescue slipped 2.9% after saying guidance for FY 2026 total mining shipments remained unchanged. Other notable decliners included Northern Star Resources (-2.3%), Qantas Airways (-1.9%), Sigma Healthcare (-1.1%), and BHP Group (-0.5%).