Australian stocks ease from record highs as rising oil prices fuel investor caution

Australian shares took a breather on Friday after scaling successive record highs this week, as surging oil prices renewed concerns over access to the Strait of Hormuz and dampened sentiment.

The S&P/ASX 200 slipped 0.1% to 9,263.60 points, finishing just about 33 points shy of its record peak hit in the previous session.

The benchmark is up 3.2% for the week, its best showing in four months.

The Sydney share market, heavily weighted toward defensive sectors such as banking, mining, and healthcare, has outperformed regional peers and Wall Street since June, as the volatility in AI-driven trades pushed investors toward safer options.

However, firmer oil prices due to concerns over reopening plans for the Strait of Hormuz tempered broader risk appetite on the day.

The day’s moves are a combination of profit-taking and earnings positioning towards sectors with stronger earnings prospects, said Rob Wilson, head of investment strategy at trading platform firm Selfwealth by Syfe.

Financials fell 1%, leading losses on the benchmark, with the “big four” banks losing between 1% and 1.6%.

Healthcare stocks declined 0.9%.

However, the two subindexes are up 1.4% and 5% this week, respectively.

Limiting losses, miners climbed 1.3% on the day, on the back of firmer iron ore prices, and marked their strongest weekly gain in more than five months.

Heavyweights BHP and Rio Tinto gained between 0.2% and 0.8% respectively.

Energy stocks rose 0.6% on higher oil prices, but

 remained down nearly 2% for the week, their worst weekly performance in six weeks.

New Zealand’s S&P/NZX 50 dropped 1% to 13,824.13, about 188 points shy of the record peak hit earlier in the week.

The benchmark has gained 0.9% in the week.