Australian Shares Retreat on Geopolitical Tensions

The S&P/ASX 200 fell 0.5% to 9,158 on Monday, retreating from record highs as global risk sentiment deteriorated amid escalating tensions in the Middle East. Geopolitical risks escalated after US and Israeli strikes on Iran over the weekend, following Tehran’s refusal to curb its nuclear program.

Iran retaliated after the attacks reportedly killed Supreme Leader Ayatollah Ali Khamenei.

Domestically, the manufacturing PMI was revised down to 51.0 in February 2026 from a preliminary reading of 51.5, marking the lowest level in four months and easing from 52.3 in January.

Banking stocks led the declines, with Commonwealth Bank of Australia, National Australia Bank, Westpac Banking Corporation, and ANZ Group Holdings falling 2.7%–3.3%.

In contrast, Woodside Energy and Santos jumped 5.7% and 6.4%, while gold miners Newmont Corporation, Northern Star Resources, and Evolution Mining rose between 4.8% and 6.4% on higher commodity prices.