Global Markets | Australian shares suffer worst week in a year as Middle East war rages

Australian shares logged their worst week in nearly a year on Friday, as an escalating conflict in the Middle East kept investors on ‌edge, with ⁠losses ⁠in heavyweight banks and miners weighing on the index the most.

Investors flocked to cash with more than A$133  billion ($93.6 billion) in value evaporating from Australian equities this week as the Middle East war stoked inflation worries.

The S&P/ASX 200 slipped 1% to 8,851 points on Friday, to end at its lowest closing point in a month. For the week, the benchmark lost 3.8%, marking its ⁠worst weekly performance ‌since late March last year.


"A prolonged Middle East conflict primarily affects Australian equities and the broader economy through energy prices, logistical costs, ⁠and inflation expectations," Ajay Datt, managing director at fund manager Datt Capital, said.

Datt maintains a positive outlook on the Australian benchmark, citing "sound health of the underlying economy".

George Kurian, a portfolio manager at Oracle Investment Management, said "wars of moderate severity are always bullish for the market" as they "rarely create long-term economic damage".

U.S. President Donald Trump claimed the right to join Iran in deciding its next leader as the U.S. and ‌Israeli war with Iran entered its sixth day.

In Australia, financials slipped 0.2% on Friday, with the 'Big Four' banks losing between 0.1% and 1.1%. The sub-index fell 3.3% for ⁠the week to its weakest since November 10.

Miners tumbled 8.6% in the week, their worst showing in three-and-a-half years. Tech stocks rose 4.6%, led by WiseTech and Siteminder, which advanced 10.8% and 13.1%, respectively.

BHP fell 4.2% after Reuters reported on Thursday, citing sources, that China's state-run iron ore buyer has widened restrictions on buying new seaborne iron ore cargoes from the world's largest listed miner.

New Zealand's S&P/NZX 50 index fell 0.7% to 13,519.35 points, down 1.5% week-on-week.

($1 = 1.4215 Australian dollars).