Global Markets | Australia shares hit four-week low; Woolworths dives as rising costs earnings

Australian shares ended at a four-week low on Thursday, extending losses to an eighth straight session as surging oil prices stoked inflation and growth worries, while top grocer Woolworths sank over 7% after warning rising costs ‌would hit ⁠earnings.

The S&P/ASX ⁠200 index fell 0.2% to 8,665.80 points, its lowest closing level since April 2. The ​benchmark has lost more than 3% in the past eight sessions, though it still ended the ​month up 2.2%, buoyed by heavyweight miners and banks.

April proved a roller-coaster month for equities: the U.S.-Iran ceasefire hopes lifted the gauge near its pre-war levels, ​but most of those gains were quickly erased ⁠as talks stalled ‌and energy flows through the Strait of Hormuz remained constrained.


On ​Friday, oil ​prices shot to their highest in four years after a report ⁠that the U.S. was considering potential military action against Iran, ​intensifying pressure on risk-sensitive equities.

"Without some relief on the ​energy front, the index (ASX 200) is likely to remain range-bound or test lower supports," said Tim Waterer, chief market analyst at KCM Trade.

On the bourse, miners fell 2.7% in their worst session since April 2, despite firmer iron ore and copper prices. Woolworths shed 7.8% after trimming the full-year earnings outlook for its domestic ‌food segment, pulling consumer staples down 5%.

Waterer said earnings hits linked to the conflict remain isolated cost shocks for now and ​do not represent ​an earnings reset across ⁠the board, but warned a prolonged energy shock could trigger "widespread margin pressure" later in the year.

Financials added 1% on the day, with the so called 'big four' ​banks, up between 0.5% and 1.3%. The sector gained 2.9% in April.

Energy stocks extended gains to add 1.4%, but ended the month 2.7% lower.

Focus now turns to Tuesday's central bank cash rate decision, with all major banks predicting a 25-basis-point hike.

In New Zealand, the benchmark S&P/NZX 50 index rose 1% to 12,903.31 points.