Australian shares hit six-week low as oil tops $100 on Middle East tensions

Business Recorder reported that Australian stocks fell to a six-week trough on Thursday, with every sector in negative territory, as the Middle East conflict pushed crude above $100 a barrel and revived inflation worries. By 0020 GMT the S&P/ASX 200 had shed 1.4% to stand at 8,785.20. The benchmark had already ended Wednesday at its weakest since July 27, after Iran and the United States hit tankers in the heaviest round of shipping attacks since hostilities began.

The energy shock has already filtered through to Australian consumer prices, and a monthly inflation figure above forecasts has raised expectations of a fourth rate increase this year. Market pricing puts a 77.3% probability on a quarter-point rise when the Reserve Bank of Australia meets later this month.

Financial shares dropped 1.3% to their weakest since mid-June, and every one of the Big Four banks lost between 1.3% and 1.8%. The lenders have pointed to higher borrowing costs and recent tax policy changes as a drag on home-loan application volumes. Property and discretionary stocks eased 1.3% and 0.9%, while miners slid 2.2% to a three-week low and energy shares fell 0.3% despite the crude rally, with Woodside Energy's 0.3% decline weighing on the sub-index.