Australian shares fall sharply as Middle East tensions and global market jitters weigh on investors.
The Australian share market fell sharply in early trading on Tuesday, as investors returned from the King’s Birthday holiday on the east coast and reacted to renewed uncertainty over tensions in the Middle East.
The S&P/ASX 200 dropped more than 1.5 per cent at the open, slipping below the 8,500-point mark. The decline came despite a modest recovery on Wall Street overnight, where technology stocks and chipmakers helped US markets rebound after last week’s heavy sell-off.
Sentiment was briefly supported after reports that Iran and Israel had paused attacks following calls from US President Donald Trump for both sides to “stop shooting”.
The latest flare-up marked the most direct confrontation between the two countries since a ceasefire in April.
Mining stocks led the losses on the ASX, falling around 4 per cent within the first half hour of trade. Major iron ore producers including Fortescue, Rio Tinto and BHP all dropped between 3 and 4 per cent.
Lithium stocks such as Mineral Resources and IGO also fell sharply.
Gold miners were among the worst performers, with Perseus, Evolution, and Ora Banda all sliding more than 8 per cent, as gold prices remained elevated after recent volatility.
Energy stocks were more resilient, with Woodside and Santos edging higher as oil prices stayed near recent highs. Brent crude hovered around US$94 a barrel, supported by ongoing geopolitical risks, although still below recent peaks.
Technology and telecommunications stocks also weakened, while healthcare stood out as the strongest sector, rising around 4 per cent.
Other defensive sectors such as consumer staples and utilities also posted gains.
By mid-session, the ASX 200 had recovered some losses but remained down around 0.4 per cent, with miners and IT stocks still under pressure.
Overnight on Wall Street, markets ended mixed. The Dow Jones fell slightly, while the S&P 500 and Nasdaq posted gains helped by bargain buying in major tech stocks. Apple shares, however, slipped despite announcing new AI features for Siri.
Analysts said recent strong US employment data has unsettled markets by increasing expectations that the Federal Reserve may keep interest rates higher for longer.
Concerns also linger after weaker-than-expected results from chipmaker Broadcom raised questions about the sustainability of the tech rally.
Investors remain cautious as markets continue to swing between optimism over economic resilience and fears of inflation, interest rates, and geopolitical instability.