SYDNEY, March 7, 2026, 17:47 AEDT
Australian stocks took a hard hit last week, with the S&P/ASX 200 tumbling 3.8% amid escalating concerns over the Middle East conflict. Investors saw around A$130 billion ($91.4 billion) in value erased from the market. On Friday, the index sank another 1%, which wiped out close to half the gains made in February.
The timing is critical, as the selloff comes up against a more hawkish domestic rates backdrop. Reserve Bank of Australia Governor Michele Bullock called March 17 a “live meeting,” just as new data revealed fourth-quarter GDP up 0.8% and annual growth at 2.6%—both quicker than anticipated. Reuters
It was a staggered slide this week. The ASX dropped 1.34% Tuesday, followed by a 1.94% loss Wednesday, daily summaries showed. Thursday’s small 0.4% rebound barely registered before Friday took the index down another 1%, according to Reuters.
Miners took the brunt of the losses by Friday. Local miners slid 4.1%, gold miners were down 4.3%. Financials slipped 0.5%. Energy names managed a slight gain, climbing 0.2% as oil kept rising.
The split came after a tough earnings stretch. Commonwealth Bank jumped up to 8.4% in February, powered by record first-half cash earnings, while BHP surged 7% to an all-time high on a bigger-than-forecast dividend. CSL, though, slumped, sliding after posting an 81% plunge in first-half profit.
Nick Twidale at ATFX Global doesn’t mince words: “Global downturns always hit Australia harder,” he said, flagging the risk of a “real downturn” if the conflict drags out. Atlas Funds Management’s Phil Cornet echoed concerns, noting that a sustained war could batter asset prices worldwide. Meanwhile, JPMorgan strategists headed by Jason Steed called February a “record” month for sharp, single-day swings in ASX stocks. Reuters
The risk here is pretty clear. Bullock has already flagged that if energy prices keep climbing, consumers and growth will feel the pain, and inflation gets an extra push. Reuters’ global markets desk pointed out Brent jumped over 20% and U.S. crude surged 25% on the week, with the Strait of Hormuz tensions worsening. That combination can easily lock in high borrowing costs, even if sentiment keeps sliding.
There’s another route. Thursday’s short-lived bounce made clear just how fast sentiment shifts when diplomacy with Iran is even mentioned. Consumers remain wary, and with the RBA set for March 17, traders are heading into the week focused on oil, war news, and rate moves, rather than what companies are saying.
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