Australian share market drops to fresh 12-month low; gold miners rally

With the Israel-Hamas war entering its “second stage”, the Aussie share market has fallen to its lowest level since October 24 2022.

The Australian share market fell to its lowest level in more than 12 months on Monday as traders grew increasingly concerned that the escalation of the Israel-Hamas war could spill over across the Middle East.

The S & P/ASX200 lost 0.8 per cent, or 54 points, to sit at 6,772.9 at the closing bell. The All Ordinaries also fell by a similar margin.

It’s the first time the benchmark has fallen below 6,800 points this year, and to a level not seen since October 24 2022. Since the start of October, the ASX has lost more than 3 per cent.

Fresh retail sales data, released by the Australian Bureau of Statistics, showed turnover increased by 0.9 per cent in September, tripling consensus forecasts for a 0.3 per cent increase. The result strengthened expectations the Reserve Bank will hike rates when it meets on November 7.

Retail turnover figures released on Monday showed shoppers embarked on a spending spree in department stores during September. Picture: NCA NewsWire / Aaron Francis

UBS chief economist George Tharenou said the retail figures “reinforces our view the economy is surprisingly resilient, and adds to the case to hike”.

“Indeed, if this continues, it adds to the risk of an additional RBA hike” in February, he said.

Tech stocks were the only industry sector to finish in the green, rising 0.4 per cent after the tech-heavy Nasdaq rose 0.38 per cent on Wall Street on Friday (Saturday AEDT).

Gold stocks were also one of the rare winners on the benchmark, recording their biggest intraday percentage gain since October 16, up 1.5 per cent

Shares in gold miner Northern Star Resources rose 0.4 per cent to $12.09, Evolution Mining was up 0.6 per cent to $3.61, and Gold Road Resources added 1.1 per cent to $1.91.

Energy sector heavyweight lost 2.5 per cent as global oil prices retreated. Picture: supplied.

Energy stocks were the worst performers, dropping 2.6 per cent, as crude oil prices lost ground. Sector heavyweight Woodside Energy dropped 2.5 per cent to $34.31, Santos lost 2 per cent to $7.67, while Beach Energy fell 1.9 per cent to $1.54.

IG Australia market analyst Tony Sycamore said fears of a broadening of the Israel-Hamas conflict continued to play into uncertainty across equity markets.

“We‘ve seen a large amount of risk aversion into the weekend, and in terms of preparing for the worst and hoping for the best in the Middle East,” Mr Sycamore said.

Mr Sycamore agreed that the hotter-than-expected retail spending data had firmed chances of a November rate hike.

“If there was any doubt about whether the RBA was going to hike rates next Tuesday, I think you can pretty much well put that to bed because that was just another red hot data print and it shows that the economy still just far too hot,” he said

Endeavour Group, owner of Dan Murphy’s, noted that shoppers were looking for bargains and opting for cheaper products. Picture: NCA NewsWire / Dan Peled

The Aussie dollar is buying US63.53c.

In company news, Casino operator The Star Entertainment Group extended its losses on Monday, plummeting a further 8.4 per cent to 55c, in the wake of the Queensland state government introducing tough new casino controls.

Lithium miner IGO fell 9 per cent to $9.69, the lowest since July 2022, after announcing that lower lithium prices would reduce its sales for the December quarter.

Endeavour Group reported sales for the first quarter of $3.09 billion, noting that consumers were opting for cheaper products over their premium offers. Shares were down 2.2 per cent to $4.91 at the end of trading.

Originally published as Australian share market drops to fresh 12-month low; gold miners rally