Australian shares fall on weaker commodities; on track for second weekly gains on Iran deal

Australian shares fell on Friday as weaker commodity prices weighed on heavyweight mining stocks, although the benchmark headed for its second straight weekly gain as investors cheered the US-Iran peace deal and as oil flows strengthened.

The S&P/ASX 200 index fell 0.9% to 8,831.10 by 0012 GMT.

The benchmark, however, has added 0.3% this week and is set for a second straight weekly gain, aided by market relief over the US-Iran peace deal.

Mining stocks lost 2.7%, shedding after iron ore prices weakened as lower energy prices and freight prices removed cost support, amid weak demand in top steelmaker China.

World’s top miner BHP dropped 3.3%, despite being set to add 0.3% this week.

Rio Tintodropped 2.6%, while Fortescue lost 1.8%.

The sector was also weighed by gold producers’ 2.5% fall, pressured after the US Federal Reserve tilted hawkish on its monetary policy, sending bullion prices lower.

Gold stocks, however, were set for their best week since August last year, adding nearly 10.1% as the US-Iran peace deal aided a gold rally earlier in the week.

Evolution Mining lost 3.3%, paring weekly gains to 8.3%, which would make it its best week since late February if current trends hold.

Financials lost 0.4% but is still headed for its best week since May 18. Macquarie Group posted a weekly gain of 3.3% so far.

The investment bank hit a record high earlier in the week.

Energy stocks extended losses into a third session, dropping 1.1% and set for their worst weekly performance since March last year, with the US-Iran peace deal bringing oil prices to near pre-war levels.

Meanwhile, shares of IDP Education rose as much as 17.9%, its biggest intraday percent gain since late February. The education consultant unveiled an A$50 million ($35.05 million) buyback.