SYDNEY: Australian shares ended 1% lower on Friday, closing at a two-month low, as miners and financials led broad-based selling after reports of escalating tensions in the Middle East prompted investors to dial back on their risk appetite.

The S&P/ASX 200 index closed at 7,567.3 points and recorded its lowest closing level since Feb. 14. The benchmark index lost nearly 3% this week, posting its biggest weekly decline since September 2023.

Multiple reports earlier in the day stated that Israel had attacked Iran, re-igniting fears of an escalation in the Middle East and spurring a sell-off in global markets.

Lacklustre Australia jobs data and persistently hawkish comments from the US Federal Reserve officials have also weighed on investors’ rate-cut expectations over the past week.

Concerns over higher-for-longer interest rates, combined with geopolitical tensions have “made for a particularly bad week for the ASX,” Simpson said.

Miners led losses with a 1.2% drop after iron ore prices retreated.

Mining goliaths BHP and Rio Tinto fell 1% and 1.2%, respectively.

Whitehaven Coal edged 0.1% higher after flagging a potential stake sale in its Blackwater coal mine in Queensland, and recording a rise in quarterly output.

Banks dropped 1.1%, bringing weekly losses to 3.1%, their biggest weekly drop since mid-March.

The ‘Big Four’ lenders declined between 1.1% and 1.6%.

Energy companies dipped 0.1%, with oil and gas giant Woodside Energy losing 0.2% after posting a drop in its quarterly revenue.

New Zealand’s benchmark S&P/NZX 50 index fell 0.3% to finish the session at 11,796.21 points.