Global Markets | Australian shares fall for fifth straight session as stalled US-Iran talks cap risk appetite

Australian shares ended modestly lower on Monday, falling for a fifth straight session, as risk appetite was capped by concerns that stalled U.S.-Iran peace talks could prolong disruptions to Middle East energy ‌supplies. The S&P/ASX ⁠200 index ⁠fell 0.2% to 8,766.40 points, after last week's 1.8% decline. On Saturday, the U.S. scrapped a planned visit of its envoys to Islamabad for talks with Iran, later saying Tehran "offered a lot, but not enough," as longstanding disagreements over terms of the potential peace deal linger.

While fading diplomacy is the trigger for the ASX200's subdued performance, "the real weight underneath is a toxic cocktail of unresolved geopolitics, sticky inflation ⁠and monetary policy ‌uncertainty that offers no clear anchor," said Hebe Chen, market analyst at Vantage Markets.

The benchmark is down more than 4.5% since ⁠the Middle East conflict began on February 28. Financials were the biggest drag on Monday, down 0.5% with three of the so-called 'big four' banks falling between 0.1% and 1%. Investors are positioning for a softer earnings season from banks - which is set to begin with ANZ's half-yearly results on Friday - as higher rates and cost pressures start to bite, Chen said. Energy stocks shed 1.9%, even as crude prices rose nearly 2%, with Chen pointing to ‌profit-booking after the sector's over 4% jump over the last two sessions.


Origin Energy slumped 5% after it reported a 17% drop in third-quarter revenue from its stake in ⁠the Australia Pacific LNG project.

Miners were the sole advancing sector, up 0.7%, marking their best day since April 15. Heavyweight Rio Tinto added 0.6%, while gold stocks surged 1.6% as a weaker greenback supported the bullion. Attention now turns to Australia's March consumer price index, due Wednesday, which will be the first inflation reading since the U.S.-Iran war began. It will be a key input into the central bank's May policy decision.

New Zealand markets were shut on Monday for a local public holiday.