Australian shares slip as renewed Middle East tensions curb risk appetite

Tabcorp Holdings

08/05/2026 08:06

Updates to close

ASX200 falls 1.5% amid growing Middle East tensions

Miners lose 1%, banks down 2.3%

Tabcorp sheds 14.2%, extends loss rally to second straight session

By Sruthi Narasimha Chari

May 8 (Reuters) -
Australian shares fell on Friday, wiping out gains from the previous two sessions, as broad-based selling swept the market after fresh exchanges of fire between the United States and Iran rattled sentiment.

 The S&P/ASX 200 index .AXJO ended 1.5% lower at 8,744.40. Despite the decline, the benchmark rose 0.2% for the week, though it remained below record highs hit in early March.

Investors capped a week in which the Reserve Bank of Australia hiked its interest rates for the third time this year.

However, sentiment worsened overnight, with the U.S. and Iran escalating hostilities.

"New clashes have shattered hopes of a diplomatic resolution and triggered a flight to safety among investors," said David Tuckwell, chief investment officer at ETF Shares.

Mining stocks .AXMM fell 1% on declining metal prices. MET/L

Global mining majors, BHP BHP.AX and Rio Tinto RIO.AX, fell 1% and 0.8%, respectively while Fortescue FMG.AX lost 0.7%.

Banks .AXFJ slipped 2.3%. Among lenders, Westpac WBC.AX was the biggest laggard on the sub-index after trading ex-dividend, while the other "Big Four" banks ended 1.5% to 2.9% lower.

Tuckwell added a weakening macroeconomic outlook, combined with a more hawkish central bank that has already delivered three rate hikes this year, was putting pressure on banks.

Top Australian investment bank Macquarie MQG.AX reversed course and closed 1.1% lower after hitting a record high earlier in the session, even as its commodities arm drove its strongest annual profit in three years amid Middle East volatility.

Energy stocks .AXEJ dropped 1.6%. Oil and gas firms Woodside Energy WDS.AX and Santos STO.AX both shed 1.4%.

Wagering firm Tabcorp TAH.AX fell 14.2%, extending losses after a more than 23% plunge in the previous session on a probe into money-laundering risks.

In New Zealand, the S&P/NZX 50 index .NZ50 declined 0.7% to 13,175.13, though the benchmark still gained 1% for the week.

Australian shares drift below key 9,000 mark after February record run https://tmsnrt.rs/4dwdcbN

(Reporting by Sruthi Narasimha Chari in Bengaluru; Editing by Nivedita Bhattacharjee)

((Sruthinarasimha.chari@thomsonreuters.com))