Australian shares slip as mining losses outweigh energy gains on Mideast conflict

Australian shares edged lower on Tuesday as losses in miners and banks outweighed gains in energy stocks driven by fears that the Middle East conflict could disrupt oil shipments through the key Strait of Hormuz.

The S&P/ASX 200 index fell 0.2% to 8,787.10 by 0006 GMT after closing flat in the previous session.

The US carried out a third consecutive night of strikes against Iran on Monday and two tankers came under fire in the Strait of Hormuz, after President Donald Trump said Washington was reinstating its blockade of Iranian shipping in the Gulf.

Oil prices jumped more than 9% overnight, helping Australian energy stocks rise as much as 3% in early trade on Tuesday and hit their highest since June 15.

Sector majors Santos and Woodside Energy climbed 2.6% and 3.6%, respectively.

Heavyweight miners fell 0.4%, tracking weaker iron ore prices as markets braced for possible production cuts by Chinese steel mills.

Sector giant Rio Tinto slid 0.1% ahead of its second-quarter production results on Wednesday.

Gold stocks fell 2.3% and were on track for their biggest drop since July 8, tracking softer bullion prices on expectations of higher-for-longer US interest rates.

Evolution Mining and Northern Star Resources declined 1.7% and 3.1%, respectively.

Financials fell 0.4%, with the “Big Four” banks down between 0.4% and 0.9%. Industrials slipped 0.8%, with Worley, Qantas and Virgin Australia shedding between 2% and 2.6%.

Technology stocks slipped 1.1% after Wall Street peers closed lower overnight.

Xero fell 0.5%, while NEXTDC slumped 2.2%.

Further south, New Zealand’s benchmark S&P/NZX 50 index fell 0.3% to 13,681.91.

Reserve Bank of New Zealand Chief Economist Paul Conway said higher oil prices could push up inflation expectations and may require further interest-rate increases.