Shares slip as markets prepare for Mideast escalation
The S&P/ASX200 fell 12.2 points, or 0.14 per cent, to 8,529.1, as the broader All Ordinaries lost 13.7 points, or 0.15 per cent, to 8,758.1.
The downswing followed a weak Wall Street session overnight, after US President Donald Trump called for Iran's "unconditional surrender" after days of air strikes between it and Israel and as America bolsters its military forces in the Middle East.
"We know exactly where the so-call 'Supreme Leader' is hiding," Mr Trump told followers on Truth Social.
"We are not going to take him out (kill!), at least not for now."
US equities fell and and bonds rallied overnight as global investors prepared for an escalation of the conflict, Moomoo market strategist Jessica Amir said.
"Hang Seng and Nikkei futures are pointing to opening drops that echo US moves, while China and Australia may see less short-term impact," she said.
As air strikes between Iran and Israel continued, oil prices again surged to four-month highs, sending local energy stocks one per cent higher.
Brent crude futures are trading at $US75.10 a barrel, while their West Texas equivalent trades at $US74.61 a barrel.
Prices for natural gas and coal also hit multi-month highs, helping send Beach Energy, Yancoal and Ampol more than three per cent higher, the best performers of the top 200.
Large cap miners weighed on the bourse, sending the materials sector down 1.4 per cent as iron ore prices slipped to their lowest level since September 2024.
The commodity's price has been grinding lower all week against a backdrop of strong ore production and a reduction in steel output from mills in China in May.
Fortescue plummeted more than four per cent, as BHP lost 1.3 per cent and Rio Tinto slipped 0.4 per cent.
Gold prices have been relatively subdued despite the broader return to risk-off sentiment, with futures consolidating around $US3,400 ($A5,245) an ounce, easing since Tuesday's ASX close and weighing on local miners as the greenback pushed higher against the Aussie dollar.
Australia's financial sector was trading just below flat and if the banks can catch a bid in the afternoon it could break a five-session losing streak.
ANZ was faring the worst of the big four, down one per cent to $29.17, while CBA was their best performer, up 0.2 per cent to $179.44 per share.
Surprisingly, Australia's IT sector shrugged off the broader risk sentiment, up 1.2 per cent, tracking with a lift in Nasdaq futures, which point to a rebound for the tech-heavy US index after it lost 0.9 per cent overnight.
Logistics technology provider WiseTech Global was a clear winner, up 2.4 per cent to $109.95, while accounting software Xero and software-as-a-service provider TechnologyOne both gained more than 1.3 per cent each.
Utilities was again the worst performing sector, down 0.7 per cent and handing back gains for a third straight session after rallying more than four per cent on Friday.
The Australian dollar is buying 64.84 US cents, down from 65.38 US cents on Tuesday at 5pm.
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The summit, the first between a US and Russian leader since 2021, will begin at 11am on Friday (5am on Saturday AEST) at a Cold War-era air force base. Trump, who once said he would end Russia's war in Ukraine within 24 hours, conceded on Thursday it had proven a tougher nut to crack than he had thought. He said if Friday's talks went well, quickly setting up a subsequent three-way summit with Zelenskiy would be even more important than his encounter with Putin. A source acquainted with Kremlin thinking said there were signs Moscow could be ready to strike a compromise on Ukraine given Putin understood Russia's economic vulnerability and costs of continuing the war. Ukraine and its European allies were heartened by a call on Wednesday in which they said Trump had agreed Ukraine must be involved in any talks about ceding land. Zelenskiy said Trump had also supported the idea of security guarantees for Kyiv. Russia, whose war economy is showing signs of strain, is vulnerable to additional US sanctions - and Trump has threatened tariffs on buyers of Russian crude, primarily China and India. The day before the summit, Putin held out the prospect of something else he knows Trump wants - a new nuclear arms control agreement to replace the last surviving one, which is due to expire in February 2026. Trump said on the eve of the summit that he thought Putin would do a deal on Ukraine, but he has blown hot and cold on the chances of a breakthrough. Putin has so far voiced stringent conditions for a full ceasefire, but one compromise could be a truce in the air war. Putin has said he is open to a ceasefire but has repeatedly said the issues of verification need to be sorted out first. Zelenskiy has accused Putin of playing for time to avoid US secondary sanctions and has ruled out formally handing Moscow any territory. Trump has said land transfers could be a possible way of breaking the logjam. Beyond territory, Ukraine has been clear in talks with Western allies that it needs a security guarantee backed by Washington. Putin in 2024 stated his demands for stopping the war - the withdrawal of Ukrainian troops from the parts of Donetsk, Zaporizhzhia and Kherson regions that they still control, an area now of about 21,000 sq km. Putin also said Kyiv would have to officially notify Moscow that it was abandoning its plans to join NATO, and it intended to remain neutral and non-aligned. Ukraine says these terms are tantamount to asking it to capitulate. US President Donald Trump has departed Washington aboard Air Force One to head to a meeting with Russian President Vladimir Putin in Alaska for discussions about a possible ceasefire deal for Ukraine. Trump was accompanied by Secretary of State Marco Rubio, Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and CIA Director John Ratcliffe, as well as other top aides, the White House said on Friday. "HIGH STAKES!!!" Trump wrote on his social media platform before leaving the White House for a trip the US sees as a possible way to end the deadliest war in Europe since World War II. Ukrainian President Volodymyr Zelenskiy, who was not invited to the talks, and his European allies fear Trump might sell out Ukraine by essentially freezing the conflict and recognising - if only informally - Russian control over one-fifth of Ukraine. Both Trump and Putin are seeking wins from their first face-to-face talks since Trump returned to the White House. Trump, who casts the war as a "bloodbath" fraught with escalatory risk, is pressing for a truce in the three-and-a-half-year-old war that would bolster his credentials as worthy of the Nobel Peace Prize. For Putin, the summit is already a big win as he can use it to say that years of Western attempts to isolate Russia have unravelled and that Moscow has retaken its rightful place at the top table of international diplomacy. The summit, the first between a US and Russian leader since 2021, will begin at 11am on Friday (5am on Saturday AEST) at a Cold War-era air force base. Trump, who once said he would end Russia's war in Ukraine within 24 hours, conceded on Thursday it had proven a tougher nut to crack than he had thought. He said if Friday's talks went well, quickly setting up a subsequent three-way summit with Zelenskiy would be even more important than his encounter with Putin. A source acquainted with Kremlin thinking said there were signs Moscow could be ready to strike a compromise on Ukraine given Putin understood Russia's economic vulnerability and costs of continuing the war. Ukraine and its European allies were heartened by a call on Wednesday in which they said Trump had agreed Ukraine must be involved in any talks about ceding land. Zelenskiy said Trump had also supported the idea of security guarantees for Kyiv. Russia, whose war economy is showing signs of strain, is vulnerable to additional US sanctions - and Trump has threatened tariffs on buyers of Russian crude, primarily China and India. The day before the summit, Putin held out the prospect of something else he knows Trump wants - a new nuclear arms control agreement to replace the last surviving one, which is due to expire in February 2026. Trump said on the eve of the summit that he thought Putin would do a deal on Ukraine, but he has blown hot and cold on the chances of a breakthrough. Putin has so far voiced stringent conditions for a full ceasefire, but one compromise could be a truce in the air war. Putin has said he is open to a ceasefire but has repeatedly said the issues of verification need to be sorted out first. Zelenskiy has accused Putin of playing for time to avoid US secondary sanctions and has ruled out formally handing Moscow any territory. Trump has said land transfers could be a possible way of breaking the logjam. Beyond territory, Ukraine has been clear in talks with Western allies that it needs a security guarantee backed by Washington. Putin in 2024 stated his demands for stopping the war - the withdrawal of Ukrainian troops from the parts of Donetsk, Zaporizhzhia and Kherson regions that they still control, an area now of about 21,000 sq km. Putin also said Kyiv would have to officially notify Moscow that it was abandoning its plans to join NATO, and it intended to remain neutral and non-aligned. Ukraine says these terms are tantamount to asking it to capitulate.
