Australia shares end lower as inflation, Iran peace deal concerns weigh

Commonwealth Bank of Australia

26/05/2026 07:39

Updates to market close

ASX200 down 0.4%

Banks fall for second straight day

ASX tumbles 13.2%

Fisher & Paykel among top NZ50 movers

By Nikita Maria Jino

May 26 (Reuters) - Australian shares snapped a three-session rally to close lower on Tuesday, with the banking sub-index as the major laggard, as traders considered concerns of stubborn inflation and dampening hopes of a U.S.-Iran peace deal.

The S&P/ASX 200 index .AXJO finished 0.4% lower at 8,657.80.

Risk appetite was dented by shaky prospects of an imminent resolution in the Middle East after fresh U.S. strikes in the region, adding to worries of sticky inflationary pressures brought on by surging oil prices. MKTS/GLOB

"The prospect of another firm domestic CPI reading tomorrow has revived fears that inflation could become more entrenched, potentially keeping pressure on interest-rate-sensitive parts of the market," said Greg Smith, investment specialist at Generate KiwiSaver Scheme.

Financials .AXFJ lost 0.7% with Commonwealth Bank of Australia CBA.AX inching down 0.2%. The top lender has slid around 5% this month after flagging Middle East-related risks, while investors also weighed whether federal budget tax changes could curb mortgage credit growth.

Energy stocks .AXEJ booked losses for the second straight day, with Woodside Energy marginally falling 0.1%. Santos surrendered earlier gains to close down 0.9%, after
unveiling
 plans to prioritise LNG and oil growth while aiming to reduce debt by $2.5 billion by 2030.

Mining stocks .AXMM were an outlier to slightly rise 0.2%, parallelling steady copper prices. BHP BHP.AX and Rio Tinto RIO.AX gained 0.4% and 0.3%, respectively. MET/L

Gold miners .AXGD however snapped a three-day winning run, tracking lower bullion prices. Northern Star Resources NST.AX and Evolution Mining EVN.AX fell 1.2% and 0.6%, respectively. GOL/

Among individual stocks, bourse operator ASX ASX.AX fell 13.2% to its lowest in nearly two months on flagging higher tech-driven costs.

Meanwhile, Atlas Arteria ALX.AX rose nearly 1% after an independent expert backed its rejection of IFM Global Infrastructure Fund's A$6.89 billion ($4.93 billion) takeover.

New Zealand's S&P/NZX 50 index .NZ50 ended up xx% at xx. Fisher & Paykel Healthcare FPH.NZ was among the top gainers on the benchmark after forecasting upbeat annual earnings.

($1 = 1.3963 Australian dollars)

(Reporting by Nikita Maria Jino in Bengaluru; Editing by Nivedita Bhattacharjee)

((Nikita.Jino@thomsonreuters.com;))