Shortly after midday on Monday, the S&P/ASX200 index was down 49.7 points, or 0.57 per cent, to 8,695.2, while the broader All Ordinaries had fallen 47.1 points, oor 0.52 per cent, to 8,933.4.
EToro market analyst Josh Gilbert said that risk-off sentiment was likely to prevail after the UAE, Kuwait and Qatar all reported drone strikes in the region and US President Donald Trump slammed Iran's offer to end the war.Â
"Trump calling the offer 'totally unacceptable' is exactly the kind of headline that markets hate," Mr Gilbert said.
The Strait of Hormuz remains largely closed, Mr Gilbert added, and each failed negotiation is a reminder that there is no quick fix to the biggest oil supply disruption in history.
Domestically, investors are also waiting for details of Australia's 2026/27 federal budget, which Treasurer Jim Chalmers will hand down on Tuesday night.
At midday five of the ASX's 11 sectors were higher and six were lower.
Health care was by far the biggest mover, dropping 8.3 per cent as CSL sank 18.6 per cent to a more than decade-low of $97.57 on profit downgrades and asset write offs.
CSL shares are now down 43.8 per cent so far in 2026, on top of a 38.7 per cent drop in 2025. They also lost a small amount of ground in 2024, 2023, and 2022.
In the financial sector, all of the big retail banks were lower, with ANZ falling 2.6 per cent, NAB and Westpac retreating 1.4 per cent and CBA dipping 0.9 per cent.
The energy sector was up 0.3 per cent as Brent crude hit a five-day high of $US104 a barrel on the renewed tension in the Middle East, with Woodside up 1.3 per cent and Santos adding 0.2 per cent.
In the heavyweight material sector, Dyno Nobel had climbed 10.8 per cent to $3.68 after the explosives manufacturer announced it had made a $20 million profit in the first-half, up from $7 million a year ago.
BHP was up 0.9 per cent, Rio Tinto had grown 0.7 per cent and Fortescue had climbed 0.5 per cent.
In consumer staples, Metcash climbed 6.0 per cent to $2.905 after the IGA supplier said it expected to announce an underlying profit after tax of around $268 million to $270 million for the year ended April 30.
"We have delivered a solid result supported by the resilience of our food and liquor businesses, our diversified portfolio and disciplined execution," chief executive Doug Jones said.
In currency, the Australian dollar remained at a near four-year high against its US counterpart, buying 72.32 US cents, from 72.24 US cents around 5pm on Friday.
