Australian shares hit over 1-month low as oil prices amplify inflationary woes

Keppel

18/05/2026 08:00

Updates to close

ASX200 falls over 1.5% to over a month's low

Miners decline 2.8% on weak commodity prices

Energy stocks up 2% on robust oil prices

By Anjali  Singh

May 18 (Reuters) -
Australian shares closed at their lowest in more than a month on Monday, dragged down by mining and gold stocks after a slump in commodity prices, while stalled Middle East peace talks lifted crude prices and fuelled inflation concerns.

The benchmark S&P/ASX 200 index .AXJO ended 1.5% lower at 8,505.30 points, its weakest close since March 31.

Miners .AXMM fell 2.8% to a near one-week low as commodity prices declined. IRONORE/ MET/L

BHP BHP.AX and Rio Tinto RIO.AX dropped between 2.8% and 3.6%. IRONORE/ MET/L

Gold miners .AXGD slumped 4%, while real estate .AXRE fell about 3% and financials .AXFJ lost 0.3%.

        Defying the broader sell-off, energy stocks .AXEJ rose 2% on strong oil prices, with Woodside Energy gaining 2.9% and Santos STO.AX rising 2.7% to a one-month high after achieving first oil from the initial phase of its Pikka development project in Alaska, U.S. O/R

Oil prices rose after a drone strike set off a fire at a nuclear power plant in the United Arab Emirates, compounding global energy shocks, which have led central banks, including the Reserve Bank of Australia, to reassess and recalibrate their outlooks for growth and inflation.

Australia's central bank raised its inflation forecasts and downgraded the outlook for economic growth earlier this month, while raising its main cash rate by 25 basis points to 4.35%.

"The market was already fragile before today. The RBA just revised up its inflation forecasts, bond yields are rising globally, and now you've got oil spiking because the Hormuz situation isn't going anywhere fast," said Mark Gardner, founder and chief executive officer at MPC Markets.

Tuas TUA.AX stood out as the benchmark's worst performer, tumbling as much as 68.7% to its lowest level since mid-September, 2023 after Singapore suspended the review of the merger between its unit Simba Telecom and Keppel's KPLM.SI M1.

New Zealand's benchmark S&P/NZX 50 index .NZ50 fell 1.6% to 12,762.92 points, its lowest close since March 30.

 (Reporting by Anjali Singh in Bengaluru; Editing by Nivedita Bhattacharjee)

 ((anjali.singh2@thomsonreuters.com;))