The S&P/ASX 200 has endured a brutal opening session on March 9, plunging 3.1% to a three-month low of 8576.80 and wiping nearly $100 billion in market value as the escalating conflict in the Middle East sent shockwaves through global finance.
Investors fled equities in a massive sell-off triggered by the closure of the Strait of Hormuz, a critical chokepoint for 20% of the world’s oil, which saw Brent crude surge over 16% to top US$107 a barrel.
The domestic materials sector bore the brunt of the damage, while a spike in Australian three-year government bonds to a decade-high of 4.58% has intensified fears of "stagflation" and an imminent interest rate hike by the Reserve Bank.
Despite the carnage, some analysts suggest Australia’s commodity-heavy index may eventually act as a geopolitical hedge, though for now, the threat of disrupted energy supplies and sticky inflation continues to spook the trading floor.