The Australian share market has closed at its lowest level in nearly a year as fighting intensifies in the Middle East.
The S&P/ASX200 on Monday finished down 56.6 points, or 0.82 per cent, to 6,844.1, its lowest level since October 28, 2022 and one that puts it in the red by 2.8 per cent year-to-date.
The broader All Ordinaries dropped 59.7 points, or 0.84 per cent, to 7,030.0.
Early on Monday, Israeli aircraft struck Hezbollah cells in Lebanon that it said were about to launch missiles and rockets towards the Jewish state, and earlier hit a mosque in the northern West Bank that Israel said was being used as a "terrorist compound".
Shell fragments from an Israeli tank also struck an Egyptian border post, wounding seven guards. Israel expressed sorrow for what it said it was an accident.
Capital.com market analyst Kyle Rodda said it was a "dangerous and volatile state of affairs" and that stocks were responding accordingly.
"Potentially, investors are pricing the risk to global growth from a conflict that spreads through the Middle East," he wrote, noting in particular the risk of Iran becoming embroiled in the fighting.
Seven of the ASX's 11 sectors finished lower, with the two commodity sectors dropping the most.
Energy fell 3.0 per cent amid a pullback in oil prices, which had been soaring since the Gaza conflict.
Woodside dropped 3.2 per cent to $35.19, Santos dipped 2.5 per cent to $7.80 and Viva Energy fell 2.9 per cent to $2.73 after announcing its Geelong refinery was still not back to full production after a compressor fell from a crane back in June.
The heavyweight mining sector closed 2.3 per cent lower, with BHP down 2.4 per cent to $43.36, Fortescue Metals dropping 2.7 per cent to $20.81 and Rio Tinto dropping 2.4 per cent to $111.85.
Graphite stocks were flying however after China over the weekend announced plans to restrict exports of the important electric vehicle battery component, a retaliation for new US limits on semiconductor exports.
Syrah Resources soared 41.5 per cent to a three-month high of 75c, Renascor Resources jumped 36.4 per cent to a two-month high of 15c, Black Rock Mining gained 35.4 per cent to a four-month high of 13c and Novonix rose 22.1 per cent to a three-week high of 80c.
The big retail banks all lost a modest amount of ground. CBA closed down 0.9 per cent to $97.82, NAB dipped 0.3 per cent to $28.56, ANZ dropped 0.2 per cent to $25.22 and Westpac edged 0.1 per cent lower at $20.84.
In consumer staples, Treasury Wine Estates rose 1.4 per cent to $11.93 after the Albanese government announced over the weekend that China had agreed to review the punishing tariffs on Australian wine it imposed three years ago.
The review is expected to take up to five months and the Penfolds owner said it had a multi-pronged strategy to rebuild its business in China should the tariffs be lifted.
In small caps, Chimeric Therapeutics soared 32.1 per cent to 3.7c after its scorpion venom-derived drug treatment showed positive preliminary success in treating five patients with late-stage brain cancer, while Immutep rocketed 20 per cent to 33c on a positive readout for its potential cancer immunotherapy, efti.
The Australian dollar was buying 63.13 US cents, from 63.10 US cents at Friday's close.
Looking forward, traders will be closely watching on Wednesday as the Australia Bureau of Statistics releases third-quarter consumer price index data expected to be critical in deciding whether the Reserve Bank raises interest rates next month.
ON THE ASX:
* The S&P/ASX200 index finished Monday down 56.6 points, or 0.82 per cent, at 6,844.1.
* The All Ordinaries dropped 59.7 points, or 0.84 per cent, to 7,030.0
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 63.13 US cents, from 63.10 US cents at Friday's ASX close
* 94.63 Japanese yen, from 94.57 yen
* 59.67 Euro cents, from 59.71 Euro cents
* 51.94 British pence, from 52.11 pence
* 108.36 NZ cents, 108.37 108.21 NZ cents
