ASX hits 10‑month low as Iran‑U.S. tensions escalate
Oil surge fuels inflation fears, keeps investors cautious
ASX down 9% in March, worst month since May 2022
Banks, miners slide; NZ stocks fall 0.7%
By Anjali Singh
Mar 23 (Reuters) - Australian shares slid to a 10-month low on Monday as escalating threats between Washington and Tehran signalling the conflict could drag on for weeks pushed oil prices higher, stoking global inflation fears and keeping investors cautious.
The S&P/ASX 200 index .AXJO fell 0.7% to 8,365.9, its lowest level since late-May, 2025. The benchmark has lost more than 9% this month which is on track to be the worst since May 2022, when surging inflation and rate-hike fears shook markets after Russia's invasion of Ukraine.
The index is also set for its weakest March since the COVID-driven selloff in 2020, with its relative strength index falling below 30 for the first time since late November, signaling oversold conditions.
Shane Oliver, AMP's chief economist and head of investment strategy, said the financial services provider expects the war and related oil shock to prove temporary, although it could still drag on for weeks, pushing up oil prices.
Oliver said Australian stocks could face the risk of a correction of at least 15% this year, with substantial risk of an even deeper selloff.
The benchmark has fallen over 10% from its record high of 9,202.90 points that it hit on February 26.
Iran said on Sunday it would strike the energy and water systems of its Gulf neighbours if Washington attacked its electricity grid, underscoring the growing risk to regional infrastructure as the war enters its fourth week.
That added to pressure on a market already rattled by the Reserve Bank of Australia's hawkish stance last week, when it warned conflict-driven increases in fuel prices could worsen inflation, if sustained. Investors now await February inflation data due Wednesday.
Rate-sensitive financials .AXFJ slipped 0.6% to a two-week low, with the big four banks losing between 0.8% and 1.8%.
Miners .AXMM fell 2.6%, with Rio Tinto RIO.AX and BHP BHP.AX dropping 1.7% and 0.8%, respectively. Gold miners fell in tandem .AXGD, down 7.3% to their lowest level since late-September, 2025 after bullion prices fell.
Bucking the trend, energy stocks .AXEJ added 1.2% on surging oil prices. O/R
New Zealand's benchmark S&P/NZX 50 index .NZ50 fell 0.7% to 12,899.72 points.
Energy rallies, gold tumbles after outbreak of U.S.–Israel–Iran conflict https://reut.rs/47RRnQP
(Reporting by Anjali Singh and Roushni Nair in Bengaluru; Editing by Ronojoy Mazumdar)
((anjali.singh2@thomsonreuters.com;))
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