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

Australian shares reached a six-week low on Thursday, with all sectors trading in the red, as tensions in the Middle East caused oil prices to surpass $100 per barrel and heightened worries about inflation. The S&P/ASX 200 index closed 1.4% lower at 8,785.20, marking its lowest point since July 27. This decline was fueled by a series of attacks on tankers by Iran and the United States, potentially disrupting energy supplies from the Gulf and further denting global risk sentiment.

The oil price surge has already impacted Australian consumer prices, fueling expectations of a fourth interest rate hike this year by the Reserve Bank of Australia. Financial institutions saw a 1.3% decline, hitting their lowest level since mid-June, as they grapple with the consequences of elevated interest rates and recent tax policy changes on home-loan application volumes.

Real estate and consumer discretionary stocks followed suit, declining 1.3% and 0.9% respectively. The mining sector also suffered, slipping 2.2% to hit a three-week low, with BHP, Rio Tinto, and Fortescue reaching their lowest levels in nearly a week. Gold miners, Northern Star Resources and Evolution Mining, were also affected, falling 1% and 1.6% respectively.

Energy stocks, however, managed to lag the broader rally, falling 0.3% due to a 0.3% decline in the heavyweight Woodside Energy. The sub-index has still managed to rise approximately 3.3% this week. Healthcare stocks dipped 0.8%, while the industrials sub-index lost 1%. In New Zealand, the S&P/NZX 50 index slipped 0.4% to a one-week low of 13,760.36.