Third straight weekly decline
Australian shares notched a third straight weekly decline as higher energy prices linked to the Middle East conflict prompted investors to reassess the outlook for interest rates after a series of tough central bank signals.
The S&P/ASX 200 dropped 69.40 points, or 0.8%, to 8428.4, leaving the benchmark 2.2% lower over the week. Since the conflict began on February 28, the index has fallen 8.4%, wiping close to $280 billion from the market.
Comments from the US Federal Reserve, European Central Bank and Bank of England reinforced expectations that interest rates could stay higher for longer. Money markets are now factoring in 3 additional rises from the Reserve Bank of Australia, which would take the cash rate to 4.85%, its highest level since November 2008.
Gold posted its sharpest weekly fall since March 2020, when markets were hit by the onset of the COVID-19 pandemic, as inflation pressures persisted and hopes for rate cuts weakened. The move weighed on gold stocks, with Greatland Resources down 7.3% to $10.11, Ora Banda Mining off 7.8% to $1.18 and Newmont slipping 2.6% to $142.46.
Oil eased from its strongest finish since July 2022 after US and Israeli officials attempted to calm markets following damage to Persian Gulf energy infrastructure. Woodside Energy rose 1% to $34.04, while Santos slipped 0.5% to $7.98. Ampol gained 0.4% to $33.11, while Viva Energy lost 2.9% to $2.36 despite extra government support for refineries.
The outlook for global liquefied natural gas supply also deteriorated, with disruptions expected to last more than a year after an Iranian strike heavily damaged production facilities in Qatar, adding to volatility across energy markets.
Coal producers advanced after Reuters reported that strikes had affected 17% of Qatar’s LNG capacity and that repairs could take years. Yancoal climbed 3.5% to $8.31 and Whitehaven Coal added 3.9% to $9.30.
3:15: Neometals re-enters upstream critical minerals sector
The S&P/ASX 200 was down 58.10 points, or 0.68%, to 8,439.70 at around 3pm today.
Neometals Ltd says it is re-entering the upstream critical minerals sector after its wholly owned subsidiary, Neometals Energy Pty Ltd, signed a binding agreement with Omaha Value Inc to secure a 51% interest in UBC through a staged funding arrangement.
UBC has been established as a special purpose vehicle for a proposed potash and lithium brine project in the Paradox Basin in the United States, with initial work to focus on project evaluation.
As part of the transaction, UBC has entered into a binding access and use licence with American Helium LLC and its affiliates, along with Ascent Resources plc, giving it rights to access inactive wells and related infrastructure across oil and gas leases in the basin.
UBC also holds mineral claims, prospecting permit applications and potash lease nominations covering more than 80,000 acres in the Lisbon Valley area of the Paradox Basin, which is considered prospective for brine-hosted lithium and potash.
Neometals said the deal gives it exposure to a large North American brine prospect and marks a return to the upstream segment of the critical minerals supply chain. The company plans to draw on its lithium experience, including its role in developing the Mt Marion lithium mine in Western Australia and its patented ELi Process, which is being evaluated by Rio Tinto.
2:15: Coles adjusts fuel levy terms as ASX heads for third weekly loss
Australian shares are on track for a third straight weekly loss as rising energy costs linked to the Middle East conflict force markets to rethink interest rate expectations after recent hawkish central bank moves.
At 2.01pm AEDT, the S&P/ASX 200 was down 30.30 points, or 0.4%, to 8467.50, with four of the 11 sectors in negative territory. The benchmark is down 1.7% for the week and has fallen 8% since the conflict began on February 28.
Against that backdrop, Coles has introduced temporary changes to its fuel levy agreement with small and medium-sized transport operators as volatility in the global oil market adds to freight cost pressures.
The supermarket giant said on Friday that, effective immediately, it would review fuel levies fortnightly instead of monthly. It will also update the pricing period used to calculate the Australian Institute of Petroleum terminal diesel gate price so it reflects the most recent review period.
A Coles spokesperson said the recent swings in oil prices were placing significant pressure on transport providers moving food across the country.
“In order to support our transport providers through this period, we have made two significant changes,” the spokesperson said.
“We will be temporarily increasing the frequency that we review the fuel component of our freight rates from monthly to twice per month – so that changing fuel costs are reflected more quickly and fairly.
“In the current climate, this means transport providers will be able to recoup more of the rising fuel costs. Further, we have also offered to reduce payment terms for some of our smaller transport providers in order to support with challenges they are facing with cashflow.”
Coles said its existing fuel surcharge mechanism already adjusts freight rates in line with fuel price movements on a monthly basis, helping smooth short-term spikes rather than respond to daily volatility.
Despite the higher fuel costs, Coles said it had not seen any disruption to goods supply across its more than 800 supermarkets nationwide.
Global rate outlook drives rethink on RBA path
Global central bank hawkishness has triggered a sharp repricing of expectations for the Reserve Bank of Australia, according to IG Markets analyst Tony Sycamore.
After aggressive policy moves from the US Federal Reserve, European Central Bank and Bank of England in response to surging energy prices, Australian interest rate markets are now pricing in 18 basis points of tightening at the RBA’s May board meeting and 67 basis points over the rest of 2026.
That implies expectations for three more 25-basis-point rate hikes this year, which would take the cash rate to 4.85% — its highest level since November 2008.
Sycamore said the repricing reflects a broader global effort to contain inflationary pressures linked to rising energy costs, marking a significant shift in expectations for Australian monetary policy.
12.25: ASX slides as losses mount on miners, gold and oil stocks
Markets reprice rate outlook after hawkish central bank signals, with traders now factoring in three more RBA hikes in 2026
The S&P/ASX 200 was lower in midday trade, falling 53.20 points, or 0.6%, to 8444.60 at 12.05pm AEDT, with materials and industrials leading losses. The benchmark had earlier been down 56.50 points, or 0.66%, to 8441.30, leaving it 2% lower for the week so far.
Sentiment was hit by a more hawkish stance from the US Federal Reserve, European Central Bank and Bank of England, prompting markets to reprice expectations for the Reserve Bank of Australia. Traders are now factoring in 3 more 0.25 percentage point rate increases in 2026, which would take the cash rate to 4.85% — its highest level since November 2008.
IG market analyst Tony Sycamore said the shift had led rates markets to aggressively price out any chance of a Fed rate cut this year, while traders in Europe and the UK were also preparing for multiple rate hikes in 2026.
Gold fell to US$4650 an ounce and was heading for its biggest weekly decline since March 2020, as persistent inflation and reduced hopes of rate cuts weighed on the precious metal.
On the ASX, losses were sharp among gold and mining stocks. Northern Star fell 2.9%, Newmont dropped 4.5% and Oba Banda Mining slumped 7.8%. BHP lost 2.2% and Rio Tinto shed 3.6% as copper prices retreated.
Brent crude eased 0.9% to US$107.62 a barrel after overnight gains reversed when Israeli Prime Minister Benjamin Netanyahu said Israel would no longer target Iranian energy infrastructure.
Among energy stocks, Woodside Energy edged up 0.1% while Santos slipped 0.6%. Refiners outperformed, with Ampol up 1.1% and Viva Energy gaining 0.4% after the Albanese government lifted refinery payments in response to the oil crisis.
11.25: Gold headed for biggest weekly loss in six years
The S&P/ASX 200 is trading lower today, down 27.10 points or 0.32% to 8,470.70 just after 11am. The session’s weakest performers are DroneShield Limited and Alcoa Corporation, which have fallen 8.55% and 8.23% respectively.
Gold was headed for its biggest weekly loss in 6 years on Friday, with Bloomberg reporting that the conflict in the Middle East has driven up energy prices and dampened expectations for interest rate cuts.
Bullion traded near US$4,650 an ounce, down about 7% for the week, marking its sharpest weekly decline since March 2020. According to Bloomberg, the surge in crude oil and gas prices has heightened inflation concerns, making central banks less likely to cut borrowing costs — a negative for gold, which offers no yield.
The precious metal, typically seen as a safe-haven asset, has now fallen each week since the US and Israel attacked Iran late last month. Bloomberg said the decline has coincided with rising US Treasury yields and a stronger US dollar, while some investors have sold bullion to cover losses in other markets and gold-backed exchange-traded funds have recorded outflows.
The US Federal Reserve left interest rates unchanged at its midweek meeting, in line with market expectations. Bloomberg reported that chair Jerome Powell indicated officials would need to see further progress on inflation before resuming policy easing.
Spot gold was little changed at US$4,653.11 an ounce on Friday after ending a 7-session losing streak on Thursday, its longest run of declines since October 2023, Bloomberg said.
ASX set for flat open as Wall Street slips, oil retreats and gold tumbles
The S&P/ASX 200 has edged lower in initial trading, falling 15.90 points, or 0.19%, to 8,481.90.
In late trade on Wall Street, the Dow Jones was down 0.45%, while the S&P 500 and Nasdaq each eased 0.3%, setting a weaker lead for Australian equities.
Local sentiment is likely to remain cautious after a volatile session for global energy markets. Oil prices pulled back overnight after earlier surging on fears of escalating conflict in the Middle East.
Oil retreat eases pressure after heavy prior-session sell-off
Bloomberg reported West Texas Intermediate crude fell 1.9% to US$94.52 a barrel, while Brent crude slipped 0.8% to US$106.53. Prices had earlier pushed towards US$120 a barrel before retreating after Israel indicated it would avoid further strikes on Iranian energy infrastructure and support efforts to reopen the Strait of Hormuz.
Israeli Prime Minister Benjamin Netanyahu said the government would refrain from targeting Iran’s major gas field at the request of US President Donald Trump, easing some immediate concerns over supply disruptions through one of the world’s most important oil shipping routes.
The reversal in crude prices helped temper inflation fears that had triggered a broader sell-off across equity markets.
ASX 200 energy stocks such as Santos Ltd (ASX:STO) and Woodside Energy Group Ltd (ASX:WDS, LSE:WDS, OTC:WOPEF) may still come under pressure despite the late pullback in oil, while gold miners could also face a weak end to the week after a sharp fall in bullion prices.
CNBC reported gold futures dropped 5.15% to US$4,642.8 an ounce, with inflation worries and expectations of higher interest rates weighing on the precious metal. That could pressure names including Evolution Mining Ltd (ASX:EVN) and Newmont Corporation (ASX:NEM).
The weakness follows a heavy sell-off on the Australian market in the previous session, when rising oil prices fuelled concern over a fresh inflation shock and the prospect of further rate tightening.
Selling was broad-based across growth and commodity-linked stocks, with only energy and more defensive names providing relative support.
Woodside was among the standout performers, climbing 7.2% as higher oil prices buoyed the sector and the company announced the appointment of former Anglo American chief executive Mark Cutifani to its board.
Elsewhere,Boss Energy Ltd (ASX:BOE, OTCQX:BQSSF) fell 6.8% after releasing a uranium resource update, Lynas Rare Earths Ltd (ASX:LYC, OTC:LYSCF) lost 2.7% despite announcing first production of samarium oxide, and Orora Ltd (ASX:ORA) slipped 2.5% after naming a new chief financial officer.