ASX falls 2pc for week as $280b wiped since Iran war began

Australian shares fell for a third consecutive week as rising energy costs caused by the war in the Middle East forced markets to reprice interest rate expectations following hawkish central bank moves.

The S&P/ASX 200 Index on Friday fell 69.40 points, or 0.8 per cent, to 8428.4, leaving the benchmark down 2.2 per cent for the week. The index has lost 8.4 per cent since the war began on February 28, erasing almost $280 billion in value.

Hawkish messaging from the US Federal Reserve, European Central Bank and Bank of England has seen money markets price in three more interest rate rises by the Reserve Bank of Australia, taking the cash rate to 4.85 per cent – the highest level since November 2008.

Rising inflation and fading prospects for rate cuts pushed gold to its biggest weekly drop since March 2020 at the onset of COVID-19, sending miners lower. Greatland Resources fell 7.3 per cent to $10.11, Ora Banda Mining dropped 7.8 per cent to $1.18 and Newmont lost 2.6 per cent to $142.46.

Oil pulled back from its highest close since July 2022 as US and Israeli leaders sought to reassure investors following damage to Persian Gulf energy infrastructure. Woodside Energy rose 1 per cent to $34.04 and Santos fell by 0.5 per cent to $7.98, while Ampol added 0.4 per cent to $33.11 and Viva Energy fell 2.9 per cent to $2.36 despite increased government refinery support.

Global liquefied natural gas supplies could face disruption for more than a year after an Iranian strike on Qatar’s production facilities caused extensive damage, deepening turmoil in energy markets.

Coal miners rose after Reuters reported strikes had damaged 17 per cent of Qatar’s LNG capacity, with repairs potentially taking years. Yancoal gained 3.5 per cent to $8.31 and Whitehaven Coal rose 3.9 per cent to $9.30.

Stocks in focus

Premier Investments slid 4.3 per cent to $11.98 after a mixed first-half result, with strength in Peter Alexander offset by a double-digit sales decline at Smiggle as the brand undergoes a strategic reset.

Virgin Australia dropped 5 per cent to $2.45, taking total losses in the past month to 24 per cent. It came as the airline said it was preparing to increase airfares by about 5 per cent to make up for higher costs including a tighter aviation fuel market.

Electro Optic Systems reversed heavy losses to close up 2.6 per cent to $9.90 after confirming chief executive Andreas Schwer sold 1.5 million shares, though the company said no further sales are planned.

Coles rose 0.8 per cent to $21.59 after flagging it would shift fuel levy reviews from monthly to fortnightly in response to oil price volatility.

That concludes our coverage for today. We’ll be back again soon to bring you more live markets news and expert analysis.