Australian shares closed at their lowest level in seven weeks on Friday, tracking a broad sell-off on Wall Street, with banks leading the losses after Macquarie Group’s earnings disappointed investors.

The S&P/ASX 200 ended 0.5 per cent lower, or 41.2 points, to 8118.8. It fell 1.1 per cent on the week, in the second consecutive week of losses. The drop on the first day of November adds to the index’s 1.3 per cent fall in October.

Of the 11 sectors, nine ended in the red. Financials were battered with Macquarie Group closing at a one-month low of $223.51 after tumbling 3.6 per cent. The investment bank’s profit for the first half of FY25 missed estimates and its dividend was reduced. The big four banks receded, with National Australia Bank hit the most, down 1.5 per cent to $38.21.

Energy was the biggest gainer, buoyed by a surge in oil prices on reports that Iran was preparing a retaliatory strike on Israel, possibly before the US presidential election on November 5.

Brent crude futures climbed 1.80 per cent to $US74.12 a barrel and US West Texas Intermediate crude futures rose 2 per cent to $US70.61. The rally sent Woodside up 1.1 per cent to $24.05, while Santos added 0.7 per cent to $6.83 and Ampol advanced 1.5 per cent to $28.3.

Materials also ended higher, having reversed early losses, after manufacturing activity in China swung back to growth in October, suggesting Beijing’s stimulus measures were working.

BHP rose 0.3 per cent to $42.78, Rio Tinto bounced 1.7 per cent to $121.33 and Fortescue also lifted 1.7 per cent to $19.49. Meanwhile, iron ore prices extended losses with the benchmark December iron ore futures contract traded in Singapore down 0.6 per cent to $US103.05 per tonne.

In corporate news, packaging giant Amcor slumped 4.3 per cent to $16.01 even as it reaffirmed its fiscal 2025 outlook and declared a slightly higher quarterly dividend from a year ago.

Mineral Resources climbed 3.1 per cent to $40.61, adding to the 9.2 per cent gain in Thursday’s session after the miner struck a $1.1 billion deal to sell its oil and gas assets to Gina Rinehart’s Hancock Prospecting.

Building materials company Fletcher Building edged 0.7 per cent higher to $2.74 despite news the New Zealand Commerce Commission was suing its Winstone Wallboards unit for allegedly using rebates to secure supply deals.