Australian shares extend selloff as crude prices fuel cost-of living woes

Australian shares dropped more than 3% on Monday, as oil prices’ ascent to over $100 per barrel due to the Middle East conflict heightened global concerns over cost-of-living crisis, dampening appetite for riskier assets.

The S&P/ASX 200 index slipped 3.2% to 8,571.1 by 2327 GMT. Last week, the benchmark lost nearly 4% since the US and Israel launched attack on Iran.

With no sign of an end to hostilities in the Middle East and tankers still not daring to cross the Strait of Hormuz, investors were bracing for a long stretch of higher energy costs.

Iran named Mojtaba Khamenei to succeed his father Ali Khamenei as supreme leader, signalling that hardliners remain firmly in charge in Tehran a week into its conflict with the United States and Israel.

Miners fell as much as 3.2% in early trade, bracing for a sixth consecutive session of declines.

Shares of BHP, the world’s largest-listed miner, dropped 4.4% on Monday, with a 9.6% loss last week in their worst week since late-August 2022.

Anglo Australian mining giant Rio Tinto dropped 2.9%, while Fortescue shed 2.4%.

Heavyweight financials fell 3.3%, with the ‘Big Four’ lenders dropping between 2.4% and 3%.

The sub-index was pulled down further by investment bank Macquarie Group, which fell as much as much as 4.5% to its lowest level since late November 2025.

Airline stocks were trading in the red as the Middle East conflict continued to disrupt global travel.

Virgin Australia hit an all-time low earlier in the session, while shares of Qantas Airways fell as much as 9.1% to their lowest level in nearly a year. Discretionary stocks fell 3.3%, while real estate stocks slumped 3.2%.

Energy stocks climbed 2.3%, having briefly touched their highest level since mid-April 2024, as the expanding conflict fuelled fears of tighter supply and prolonged disruptions to shipments. Australian oil and gas producers Woodside Energy and Santos jumped 3% and 4.2%, respectively.

New Zealand’s benchmark S&P/NZX 50 index fell 2% to 13,255.05.