AAP Finance

Australian shares drop as Middle East conflict deepens

Mar 4, 2026

Indicator boards at the Australian Securities Exchange in Sydney — All sectors of the ASX except IT stocks were in the red by noon as war jitters weighed on sentiment. -AAP Image

Australia's share market is under pressure as the prospect of a lengthy Middle East conflict and subsequent disruption to energy markets weighs on confidence.

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The S&P/ASX fell 136.7 points by midday AEDT on Wednesday, down 1.51 per cent, to 8,936.7, as the broader All Ordinaries lost 142.1 points, or 1.53 per cent, to 9,155.1.

The slump followed a weak Wall Street session as investors weighed the potential inflationary impacts of a prolonged war in the Middle East.

Oil prices have surged 15 per cent since the US and Israel began bombing Iran at the weekend.

"Markets are recognising the Iran conflict could be drawn out and more disruptive to the world economy than initially thought," Moomoo dealing manager Paco Chow said.

"If tensions in the Gulf persist, energy and defence stocks could remain supported while airlines and rate-sensitive sectors stay under pressure."

Ten of 11 local sectors were in the red by lunchtime, with IT stocks bucking the trend with a one per cent rebound despite the segment trading at more than two-year lows.

Raw materials dragged on the bourse as gold stocks sold off after rising oil prices fed global inflation fears, reducing the outlook for monetary easing and central bank gold-buying.

Commodity prices for gold tumbled roughly four per cent to $US5,137 an ounce, weighing on ASX-listed miners Northern Star, Evolution and Newmont, which each tumbled five per cent or more.

BHP also dragged as the mining giant slipped to $55.93 and iron ore futures fell below $US99 a tonne.

BlueScope Steel was a lonely success in the materials sector, up 0.8 per cent to $27.11, after SGH boss Ryan Stokes told the AFR Business Summit he was open to further takeover talks.

BlueScope's board has not officially rejected an upgraded $14.2 billion bid from SGH and its US partner, Steel Dynamics, after saying in February that it "remains open to a transaction at a price that reflects the fair value of BlueScope".

The heavyweight financial sector fell 1.2 per cent as the big four banks, major insurers and most financial services providers tumbled.

Industrials stocks were down 1.4 per cent, with Qantas down more than 14 per cent in a week to $9.10 on the back of weaker-than-expected earnings and major disruptions to global air travel due to the Middle East conflict.

Virgin Australia fell two per cent after Qatar Airways reduced its stake in the carrier from 69.8 per cent to 67.7 per cent.

Consumer staples fell two per cent as Woolworths went ex-dividend and slipped to $35.65.

Elsewhere in the sector, Dan Murphy's owner Endeavour Group traded more than four per cent lower after posting a reduced interim profit and cutting its dividend.

Shares in ARN Media gained 1.5 per cent after the company took the Kyle and Jackie O show off air following problems between presenters Jackie "O" Henderson and Kyle Sandilands.

The breakdown comes one year into a 10-year, $200 million deal between the presenters and Kiis FM.

The Australian dollar was buying 70.12 US cents, down from 70.88 US cents on Tuesday, following news of higher-than-expected economic growth in the December quarter.