Global Markets | Australian shares fall as U.S.–Iran impasse, inflation jitters curb risk appetite

Australian shares closed at their lowest in nearly four weeks on Tuesday as stalled U.S.-Iran peace talks and caution ahead of domestic inflation data kept investors on edge.

The S&P/ASX 200 ‌index closed ⁠0.6% lower ⁠at 8,710.70 points, its lowest finishing level since April 2. The benchmark has fallen over 2.5% in the last six straight losing sessions.


A sharp rise in oil prices following the closure of the Strait of Hormuz has triggered one of Australia's biggest energy shocks in decades, raising concerns about inflation and economic growth.

Prolonged disruptions to energy flows could deepen concerns over slowing ⁠growth and ‌persistent inflation, weighing on consumers and cyclical sectors, said William Taylor, COO and portfolio manager at ETF issuer etfshares.

Taylor added that ⁠weakness in the ASX 200 also reflected positioning ahead of March consumer inflation data due on Wednesday.

"Consensus expectations are for inflation to remain elevated year-on-year, and any upside surprise, particularly in the trimmed mean, would likely push out expectations for policy easing from the Reserve Bank of Australia."

Markets have priced in a more than 82% chance of a third cash rate hike at the central bank's May meeting.

Miners ‌led losses, falling 0.9%, as copper prices extended declines and higher shipments weighed on iron ore prices. Heavyweights Rio Tinto and BHP lost 0.5% and 1.3%, respectively.

Gold ⁠stocks fell 2.7% as bullion weakened, hitting their lowest in three weeks.

Energy was the only sector to rise, gaining 1.2%.

Whitehaven Coal rose 3.9% after reporting higher quarterly output.

Healthcare fell 1.2%, while real estate and consumer discretionary stocks lost 1.2% and 2.3%, respectively. European Lithium surged as much as 63.2% to A$0.465, hitting its highest since October 15, after it received a buyout bid from Critical Metals.

New Zealand's benchmark S&P/NZX 50 index fell 0.9% to 12,764.40 points.