Australian shares edge lower as miners retreat, markets await Middle East talks

Australian shares opened lower on Friday, with miners leading a broad pullback, as investors trod cautiously due to a continued blockade of the Strait of Hormuz while awaiting further developments in the fraught Middle East peace talks.

The S&P/ASX 200 index fell 0.5% to 8,929.10 by 1256 GMT.

The benchmark gained 2.8% in the previous two sessions, and was on track for its best week since early October 2022.

Hopes for peace talks grew on Thursday after Israel sought direct negotiations with Lebanon following heavy Israeli strikes on Lebanon that had threatened to derail the US-Iran peace negotiations.

Still, risk appetite remained in check as the Strait of Hormuz stayed under a near-total blockade and as investors waited to see how the Pakistan-mediated US-Iran talks on Saturday pan out given their sharply differing terms for a deal.

In Sydney, miners shed 0.7% after iron ore prices hit a one-month low on Thursday due to concerns over rising supply and shrinking China demand. Miners were nevertheless on track for a third straight weekly gain, up over 6%.

BHP and Rio Tinto slid 1.2% and 0.2%, respectively, on the day.

Fortescue shed 1.6% despite announcing plans to fast-track its diesel elimination plans at a major mining site.

Energy stocks fell 0.9% after oil prices pared most of their earlier gains on Thursday.

Coal miners also came under pressure, with Yancoal and Whitehaven Coal down 3.6% and 4.5%, respectively.

The energy sector was down more than 8% in what could be its worst week since mid-December after eight straight weeks of gains.

Gold stocks lost 1.3% despite overnight gains in bullion. Among individual stocks, Telix Pharmaceuticals was the top performer, rising 4.6% after the US Food and Drug Administration accepted its resubmitted application for a cancer imaging agent.

Magellan Financial climbed 0.9% after it said proxy votes showed over 91% support for a resolution to approve a share issuance tied to its proposed takeover of investment bank Barrenjoey.

New Zealand’s benchmark S&P/NZX 50 index fell 0.6% to 13,195.14 points.