The Australian sharemarket retreated from its record high on Friday as escalating tensions in the Middle East triggered a broad market sell-off. By 2pm AEDT, the S&P/ASX 200 Index had fallen 29.7 points, or 0.3 per cent, to 9168.90, with eight out of eleven sectors trading in negative territory. Investors sought refuge in safe-haven assets, boosting the US dollar and gold prices. The energy sector provided a cushion to losses on the ASX, buoyed by higher oil prices.
The surge in oil prices followed reports of strikes and subsequent retaliatory actions in the Middle East, disrupting key aviation hubs and oil shipments. Brent crude was last up 4.9 per cent to $US76.45 a barrel after rising as much as 13 per cent earlier in the session. EToro market analyst Josh Gilbert commented that the critical question for investors is the duration of the disruption, highlighting the uncertainty impacting market sentiment.
Within the energy sector, Woodside rallied 5.6 per cent, Santos 5.2 per cent, and Karoon 13.9 per cent. Gold miners also benefitted from the risk-off sentiment, with Newmont rocketing 5.6 per cent, Northern Star 3.9 per cent, and Evolution Mining 5.3 per cent. On the downside, Qantas shares declined by 5.2 per cent as the Middle East conflict disrupted international aviation. Financials were the primary drag on the bourse, with major banks experiencing heavy selling. Commonwealth Bank dropped 1.2 per cent, ANZ by 1.8 per cent, Westpac by 2.3 per cent and National Australia Bank by 2.8 per cent. Magellan Financial, an investment management company that is currently in a trading halt, has launched an equity raising to fund a $1.6 billion merger with Barrenjoey Capital Partners.
