Australian stocks drop as Middle East conflict deepens

Australian shares fell to a nearly one-month low on Friday, weighed down by miners, as global risk sentiment continued to deteriorate amid the extension of the US-Israeli war with Iran to a sixth day.

The S&P/ASX 200 index fell 1.2% to 8,831.4 points, its lowest since February 9, as of 2344 GMT.

The benchmark closed 0.4% higher on Thursday but is set to record its steepest weekly fall since mid-June 2022.

Tensions in the Middle East continue to escalate as US President Donald Trump claimed the right to join Iran in deciding its next leader, while the US House rejected an effort to stop the president’s air war on Iran.

Oil prices settled around 5% higher on growing disruption to global oil supplies, and risk-off trading pushed bond yields higher and lifted the US dollar.

Local miners slid 4.1% on the day, tracking lower copper prices as the dollar firmed and markets awaited further updates from smelters in the Middle East.

The sub-index was set for a 9.4% weekly decline, its worst week since early September 2022.

Gold miners tumbled 4.3% as bullion gave up gains on rising US Treasury yields, a stronger dollar, and concerns over inflation risks stemming from the Middle East conflict.

Financials also fell 0.5% with the “Big Four” banks falling between 0.3% and 1.1%. The banking sector is down more than 3% this week so far, its worst performance since mid-November 2025.

On the other hand, energy stocks rose 0.2% as oil extended its rally, with US futures prices rising faster than the international benchmark Brent futures as Washington said it may take action in the futures market to combat rising energy prices.

In New Zealand, the benchmark S&P/NZX 50 index fell 1% to 13,483.38 points.