Global Markets | Australian shares fall ahead of rate decision meeting

Australian shares fell on Monday, with weaker commodity prices weighing on miners as investors turned cautious ahead of an ‌expected central bank ⁠rate ⁠hike later in the week and ongoing Middle East tensions.

The benchmark S&P/ASX 200 index closed 0.4% lower at 8,583.4 points. Trading was thin as Gulf hostilities stretched into a third week, with investors focused on risks to Middle East oil facilities despite U.S. calls to safeguard the Strait of Hormuz, a key global oil route. While most central banks are expected to hold rates steady amid geopolitical uncertainty, Australia ⁠stands out ‌ahead of Tuesday's meeting, with 23 of 30 economists tipping a quarter-point rate hike.

Rate-sensitive financials rose 0.4%, with sub-index heavyweight Commonwealth Bank of ⁠Australia adding 1% to its highest in over two weeks. Energy stocks finished 0.5% higher, extending gains for a fourth straight session.


"While oil prices may come down from current levels once the conflict subsides, the geopolitical risk premium could persist if political uncertainty in Iran remains, which may continue to support energy stocks," said Cliff Man, CEO at ETF Shares. Miners fell 2.4%, hitting their lowest level since early January as iron ore ‌retreated from two-month highs. Rio Tinto and Fortescue dropped 2% and 3.9%, respectively, while BHP slid 1.2%, touching its lowest since Feb. 6 despite reports China had temporarily eased ⁠a ban on one of its iron ore products until next week. South32 fell 5.7% after the miner said it had placed its Mozal aluminium smelter on care and maintenance. Lynas Rare Earths rose 1.4% after its U.S. unit signed a binding letter of intent for a U.S. rare earth oxide supply deal.

In New Zealand, the benchmark S&P/NZX 50 slipped 0.2% to 13,164.58 points. Investors await quarterly GDP data due on Thursday for a clearer view of the economy. (Reporting by Jasmeen Ara Shaikh in Bengaluru; Editing by Nivedita Bhattacharjee)