Australian shares fall on losses in tech, discretionary stocks; US-Iran clashes resume

Australian shares fell on Tuesday, dragged down by losses in discretionary and technology stocks, as sentiment weakened amid renewed military clashes between the US and Iran and rising inflation worries.

The S&P/ASX 200 index fell 0.4% to 9,040.30, as at 0055 GMT.

The benchmark closed down 0.2% on Monday.

Oil prices climbed following fresh strikes by Iran on two US air bases in Jordan in response to an attack on Iran’s Larak Island, once again raising concerns about global supply disruption.

The energy sub-index gained as much as 1.4%, set for best day in a week.

Santos and Woodside Energy each added 1%.

Back home, data on Tuesday showed home prices declined for a fifth straight month in August as the housing downturn spread to more cities and regional areas, with the risk of further policy tightening pointing to tougher conditions ahead.

Swaps imply more than a 50% chance of a quarter-point hike in September.

Attention now shifts to second-quarter GDP figures, due Wednesday.

Rate-sensitive financials and real estate stocks slid 0.4% and 0.6%.

The “Big Four” banks were mixed.

Discretionary stocks tumbled as much as 2.8% to a nearly three-month low.

Technology stocks dropped as much as 2%, hitting a near one-month low, tracking the weakness in their US counterparts. The broader mining sub-index rose 0.1%.

BHP Group and Rio Tinto gained 0.8% and 0.7%, respectively.

Gold stocks rose 0.4%, with Northern Star Resources up 0.8%. Meanwhile, New Zealand’s benchmark S&P/NZX 50 index fell 0.9% to 13,789.38.

A Reuters poll showed the Reserve Bank of New Zealand is widely expected to raise interest rates by 25 basis points to 2.75% at Wednesday’s meeting.