Australian shares have fallen after Wall Street indices turned sharply lower overnight as Russia-Ukraine tensions came to the boil.
The ASX 200 closed down 0.5 per cent to 7,207, while the All Ordinaries index was off 0.6 per cent to 7,490.
Domestic stocks were tracking a sharp sell-off in US peers as plans to close the US embassy in Kyiv, a possible sign of an imminent Russian invasion in Ukraine, prompted investors to pull back from riskier assets.
The resources sector was hardest hit on a sharp pull back in iron ore futures and a decline in oil prices from recent peaks.
Beach Energy slumped 10.5 per cent and bigger rival Santos was off 4.2 per cent in the oil and gas sector.
Chalice Mining fell 9.6 per cent, Mineral Resources 5.3 per cent and iron ore giant Fortescue was down 5.1 per cent in the mining sector.
Outside the mining and energy sector, Resmed's 4.6 per cent fall was the biggest on the ASX 200, while Westpac's 3.4 per cent slide dented the market heavily.
On the flip side, Sims gained 13.7 per cent on a positive profit result, with Brambles and Seek both up more than 6 per cent.
Global payments giant Block gained 4.2 per cent.
BHP releases first-half profit report
BHP shares escaped the worst of the resources sell-off after an impressive profit result, closing just 0.3 per cent down at $48.18.
BHP reported a first-half profit on Tuesday that beat analysts' estimates, helped by higher commodity prices, even as the rate of earnings growth slowed sequentially due to a cutback in demand from China.
The miner also declared a record interim dividend of $US1.50 ($2.10) per share, up from $US1.01 per share a year earlier.
BHP had a busy six months marked by sweeping changes, including selling its $US13 billion ($18.2 billion) petroleum business and a listing unification, while managing pandemic-related disruptions to its business.
Iron ore prices, however, have halved from last year's record levels as China's push to curb emissions and easing construction activity in the country's debt-laden property sector curtailed demand.
The company's underlying profit attributable from continuing operations was $US9.72 billion for the six months ending December 31, compared with $US6.20 billion a year earlier. Analysts had expected a profit of $US8.96 billion, according to research firm Vuma Financial.
The near 57 per cent jump in profit, however, trailed a whopping 185 per cent gain in the June-half when iron ore prices hit a record high.
BHP said labour costs had risen due to shortages induced by COVID-19 restrictions and headwinds from bottlenecks in its supply chain will continue through 2022.
A shortage of skilled workers has hit Australian miners for months. BHP last month warned of an impact from a delay in Western Australia state reopening its borders and cut its output forecast.
The company said on Tuesday it has lowered its net debt target to $US5 billion-$US15 billion from $US12 billion-$US17 billion, after agreeing to offload its petroleum business to Woodside Petroleum last year.
BHP's net debt was $US6.1 billion as of December 31.
The Australian dollar was down at 71.24 US cents by 06:52am AEDT.
Wall St sell-off as US evacuates Kyiv embassy
News that the US is closing its embassy in Ukraine's capital Kyiv heightened geopolitical tensions and prompted a sell-off in choppy trading on Wall Street.
All three major US indexes fell after the Wall Street Journal reported that US diplomatic operations were being moved to western Ukraine, in a possible harbinger of imminent Russian invasion.
Ukraine President Volodymyr Zelenskyy urged state officials, politicians and business leaders who have recently left the country to return within 24 hours to show unity.
"Investors don't like uncertainty, and this is obviously a period of increased uncertainty and that's why you're seeing this volatility," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.
Geopolitical anxieties have been simmering in recent weeks as negotiators scramble to find a diplomatic path forward and Russia amasses troops along the Ukrainian border.
US warnings that Russia could invade Ukraine at any time pushed oil prices to fresh seven-year peaks.
But Brent crude oil had dropped back from yesterday's highs to just under $US96 a barrel by 4:30pm AEDT.
US Fed rate hike talk
Adding to the uncertainty were increasingly hawkish comments from St Louis Federal Reserve president James Bullard, reiterating his call for a faster rate hike timeline and saying the central bank's "credibility is on the line" in its battle against rising prices.
"We're contending with two major concerns," Mr Pavlik said.
"What are we going to see from the Federal Reserve and what are we going to see from Russia?"
Recent data showed US inflation at its hottest level in decades, ratcheting up concerns that the Fed could begin hiking key interest rates more aggressively than many have anticipated.
The Dow Jones Industrial Average fell 0.7 per cent, the S&P 500 lost 0.58 per cent and the Nasdaq Composite dropped 0.11 per cent.
European stocks slump
Europe's STOXX 600 share index tumbled as much as 3 per cent and spot gold headed toward its biggest single-day gain in four months even as Russia suggested it was ready to keep talking to the West to try to defuse the crisis.
Ukraine's government bonds slumped 10 per cent to their lowest level of the crisis as strength in the Swiss franc underscored the appeal of safe havens.
Markets in Europe were antsy.
Major regional bourses fell more than 2 per cent, with the pan-European STOXX 600 index down 1.92 per cent.
European natural gas prices for delivery in a month's time jumped nearly 10 per cent to 81.30 euros per megawatt hour.
ABC/Reuters
