Australian shares slumped about 3% on Monday, erasing over $138 billion in value in their worst session since last April's "Liberation Day" tariff shock, as a spike in oil prices driven by the Middle East war stoked concerns of a breakout in global inflation. The benchmark S&P/ASX 200 index closed 2.9% lower at 8,599.00 points, the lowest since Dec. 18. The main index lost about A$197.10 billion ($138.15 billion) in value, as per LSEG data, marking its worst session since early April 2025.
Oil prices surged more than 25% to their highest since mid-2022 on supply cuts and fears of prolonged shipping disruptions, prompting investors to rush out of risk assets and brace for an extended period of high energy costs.
"Australia benefits from its position as a net energy exporter, but higher oil and oil-derivative import prices affect Australian inflation quickly and broadly," analysts at National Australia Bank wrote.
"A sustained move toward $100 per barrel would push the (inflation) peak above 5%." That compares with the annual pace of inflation at 3.8% in January.
"The market will continue to grind lower until it can see a clear path towards de-escalation with Iran, the difficult part is knowing whether that will be days, weeks, months or years," Luke Winchester, portfolio manager at Merewether Capital, said.
On the bourse, miners declined 4.8% in their steepest one-day drop since April 7 last year. BHP Group fell 5.1% while Rio Tinto and Fortescue lost 3.8% and 1%, respectively.
Financials fell over 2%, with the "Big Four" banks losing between 1.6% and 2.3%.
Bucking the trend, energy stocks climbed 1.7%, driven by coal miners Yancoal Australia and Whitehaven Coal, which advanced 13.3% and 4.4%, respectively.
Elsewhere, healthcare, tech, and gold stocks lost between 3.2% and 5.2%.
In New Zealand, the benchmark S&P/NZX 50 index retreated 3.1% to 13,098.83 points, also clocking its sharpest decline since early April 2025.
Source Name : Economic Times