The Australian share market has extended the previous week's losses as fears of a broader regional conflict in the Middle East continue to fuel a sell-off in equities.
The benchmark S&P/ASX200 index on Monday finished down 54 points, or 0.79 per cent, at 6,772.9 after recovering somewhat from a 12-month low of 6,755.7 shortly after the open.
The broader All Ordinaries fell 54 points, or 0.77 per cent, to 6,960.2.
The risk-off trading comes off a slide of 1.1 per cent last week - the fifth week of losses out of the past six - pressured by higher bond yields, rising interest rate expectations and anxieties that regional players will get sucked into a wider conflagration arising from Israel's war with Hamas.
Foreign Minister Penny Wong on Monday said she remained concerned the conflict could spill over into other areas of the Middle East.
The West Texas Intermediate benchmark fell 2.9 per cent last week to $85.54 due in large part to restive conditions in the oil-producing region.
"Headlines around Gaza and, more broadly, around escalating geopolitical tensions in the Middle East will continue to make for choppy, volatile trading conditions in crude oil this week," IG market analyst Tony Sycamore said.
Hotter-than-expected retail sales figures for September heightened the prospect of a Melbourne Cup day rate rise.
The value of goods and services sold by Australian retailers grew by a robust 0.9 per cent, smashing the analyst consensus of 0.3 per cent.
Although primarily driven by temporary factors, the upside shock only adds to the case for the Reserve Bank to lift the cash rate to 4.35 per cent after inflation figures for the September quarter also came in stronger than predicted.
"Given the strong inflation print for Q3 and the hawkish turn in recent RBA communications, we expect to see another rate hike in November," said Sean Langcake, head of macroeconomic forecasting for Oxford Economics Australia.
Every sector finished in the red except for IT, which was up 0.4 per cent after the tech-heavy Nasdaq closed higher on Wall Street on Friday.
Energy was the worst hit, down 2.6 per cent, with oil giant Woodside sliding 2.5 per cent and Whitehaven Coal 5.6 per cent lower.
The heavyweight miners outperformed the index, with BHP and Fortescue Metals 0.1 per cent higher and Rio Tinto climbing 0.5 per cent.
Goldminers made strong gains as investors flocked to the safe haven commodity.
Evolution Mining firmed 0.6 per cent while mining minnow Tietto surged 32.9 per cent to 56.5c after Chinese goldminer Zhaojin offered a 58c per share takeover bid, representing a premium of 38 per cent on the previous close.
Lithium miner IGO slumped nine per cent to $9.69 after signalling volatility ahead in the market for the critical mineral.
Accounting software provider Xero was the pick of the tech stocks, up 2.2 per cent to $106.82.
The big banks all finished lower. CBA dropped 1.6 per cent, while NAB, ANZ and Westpac closed down 1.8 per cent, 1.2 per cent and 1.0 per cent respectively.
Liquor and hospitality giant Endeavour Group fell 2.2 per cent to $4.91 after investors scoffed at a 2.1 per cent increase in revenue for the September quarter.
Retail sales at the group rose 1.9 per cent as shoppers traded down to value products amid rising cost of living pressures.
Qantas lifted 0.8 per cent higher after announcing it would fight allegations of misleading conduct by the consumer watchdog.
The erstwhile consumer darling denies it misled customers by selling tickets for already-cancelled flights, arguing the Australian Competition and Consumer Commission case ignores the realities of the aviation industry.
The Australian dollar surged higher against its US counterpart following the strong retail trade readout, buying 63.54 US cents from 63.42 at Friday's ASX close.
ON THE ASX:
* The benchmark S&P/ASX200 index finished Monday down 54 points, or 0.79 per cent, at 6,772.9.
* The broader All Ordinaries fell 54 points, or 0.77 per cent, to 6,960.2.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 63.54 US cents, from 63.42 US cents at Monday's ASX close
* 95.03 Japanese yen, from 95.25 Japanese yen
* 60.16 Euro cents, from 60.07 Euro cents
* 52.44 British pence, from 52.32 pence
* 109.03 NZ cents, from 108.99 NZ cents.
