ASX 200 slips 0.46 per cent on Monday trading

The Australian sharemarket closed lower on Monday, as investors priced in rising geopolitical uncertainty in the Middle East.

The benchmark ASX 200 fell 0.46 per cent, or 35.6 points, to end the session at 7752.5, while the broader All Ordinaries index slipped 0.51 per cent, or 40.8 points, to end at 8009.4.

Tech stocks suffered a steep 1.42 per cent fall to finish at 2985.3 points.

The Aussie dollar lifted 0.31 per cent to buy US64.8c at the closing bell.

Capital.com senior financial market analyst Kyle Rodda said Friday’s sell-off and the weekend’s escalating tensions between Israel and Iran had prompted Monday’s fall.

“The inherent issue with the situation in the Middle East is that it is quite difficult to price in the markets,” he said.

“And we did see a fairly significant settle off on Friday because we were going into the weekend and we didn’t know what the events would be like and there is kind of a de-risk attitude, reduce your exposure to equities in that environment until you have better clarity over what is occurring.

“The moves today were more or less the market pricing in at the margins a heightened risk of conflict in the Middle East.”

Last week’s elevated CPI print in the US has also fuelled fears reserve bankers may hold off on expected interest rate cuts, propelling falls in rate-sensitive equities, but Mr Rodda said geopolitics was the issue of the day.

“Effectively, we were just catching up with what markets were pricing in on Friday night,” he said.

“From here what investors are looking at is what Israel does and the scale of the response, if there is a retaliation.

“That will give a view as to whether this is an ongoing issue or whether this can be put to one side and we can go back to worrying about inflation.”

Oil prices are rising on the back on the conflict and Australia’s energy sector lifted in response, finishing the day up 0.38 per cent.

Energy giant Woodside Energy rose 0.36 per cent to finish at $30.31 a share, while Santos lifted 0.9 per cent to close at $7.88.

Eight of 11 industry sectors ended in the red, with only energy, materials and staples booking small gains.

Tech stocks led the falls with a sharp 1.75 per cent decline.

Mining stocks Rio Tinto, BHP and Nickel Industries are booked gains following the announcement of new US and UK sanctions on Russian metals.

Rio Tinto led with a 3.64 per cent jump to finish at $132.55.

BHP lifted 0.55 per cent to end at $45.77 while Nickel Industries booked a 4.07 per cent rise to close at 90c.

In corporate news, casino operator Star Entertainment slumped almost four per cent to settle at 48c as the troubled gaming business wades through an second inquiry into its flagship Sydney operation.

The top gainer on the ASX 200 was Alumina Limited, which jumped six per cent to finish at $1.59, while the biggest laggard was Gold Road Resources, which slumped 6.59 per cent to $1.70.