Australian shares slipped 27 points, or 0.3%, to 8,498 in early Friday trade, extending losses after U.S. markets recorded their steepest decline since the onset of the Iran war. The sell-off was driven by a sharp rise in oil prices and heightened uncertainty surrounding negotiations.
President Trump warned that Iran must reach a deal or face sustained military pressure, adding that taking control of Iran’s oil remained on the table. At the same time, the OECD cautioned that the conflict will test global economic resilience, highlighting Australia’s vulnerability to rising interest rates and inflation. Officials at the RBA also expressed concern that prolonged tensions could push inflation expectations higher.
Sector performance was mixed. Consumer durables, non-energy minerals, and industrial services underperformed, while gains in consumer non-durables and energy minerals helped limit broader market declines. Early notable losers included BHP Group (-0.7%), Northern Star Resources (-3.3%), Lynas Rare Earths (-3.2%), and Evolution Mining (-2.7%).
Despite the weak start, the ASX is still on track for its first weekly gain in four weeks, supported by bargain hunting, and is currently up about 0.8% for the week.
