Australia Stocks Under Pressure, Weekly Gains Intact

The S&P/ASX 200 tumbled 134 points, or 1.5%, to finish at 8,744 on Friday, ending two days of gains as profit-taking and broad sector weakness dragged the market lower. The sell-off followed Wall Street’s slump Thursday amid renewed Middle East tensions after U.S. and Iranian forces exchanged fire in the Strait of Hormuz, each blaming the other for the escalation. Sentiment was further pressured by the Reserve Bank’s third rate hike this year, earlier this week, lifting the cash rate to 4.35% amid persistent inflation risks and second-round price pressures from geopolitical uncertainty. Losses were broad-based, led by financials, retail trade, logistics, and energy minerals. The four major banks plunged between 1.5% and 4.8%. Other notable laggards included Wisetech Global (-4.6%), ASX Ltd. (-3.2%), Bluescope Steel Ltd. (-2.7%), and Lynas Rare Earths Ltd. (-2.5%). Still, markets edged up 0.2% for the week, up for the first time in four weeks, helped by bargain hunting.

Australian shares tumbled 106 points, or 1.2%, to 8,773 in early Friday trade, snapping a two-day rebound as Wall Street’s overnight slide and renewed doubts over a U.S.–Iran accord pressured sentiment. Tehran signaled it would block the reopening of the Strait of Hormuz under “an unrealistic plan,” stoking energy concerns. Locally, inflation worries persisted after the Reserve Bank warned surging fuel costs from the conflict risked second-round price pressures despite three hikes this year. Trade data added to the gloom, showing the first deficit since December 2017, with imports hitting a record while exports fell. Losses were broad, led by financials, logistics, and retail. Among major laggards were Bluescope Steel (-2.4%), Reece (-1.7%), and Qantas Airways (-1.6%). Meanwhile, the big four banks slid between 1.2% and 3.8%. Still, bargain hunting has left the market up about 0.5% for the week, on track for its first weekly gain in a month.

The S&P/ASX 200 rose 85 points or near 1% to finish at 8,878 on Thursday, marking strength for the second straight session following record closes on Wall Street Wednesday, amid a strong earnings season and mounting hopes that the U.S. and Iran were closing in on an agreement to end the war. Australian markets stayed at their highest level in two weeks, boosted by gains in most sectors led by process industries, non-energy minerals, consumers, and producer manufacturing. However, gains were capped by March trade data showing the first trade deficit since December 2017, as imports hit record peaks but exports fell. Meantime, inflation jitters persisted as the Reserve Bank warned that surging fuel costs from the Middle East conflict could ignite second-round pressures in Australia, despite three rate hikes already this year. Among top movers were BHP Group (3.8%), Fortescue (3.7%), Evolution Mining (6.3%), and Lynas Rare Earths (3.6%). Also, two of the big four lenders posted gains.