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S&P/ASX 200 Index (ASX: XJO) shares are heavily in the red on Thursday.
The benchmark index tumbled 2% or 176 points to an intraday low of 8,613.2 points – a four-month low.
Every one of the 11 market sectors are in the red today.
ASX 200 energy shares are the most significant drag on the bourse today, down 3.1%, amid continually falling oil prices this week.
The Woodside Energy Group Ltd (ASX: WDS) share price is down 3.1% to $30.88.
The Santos Ltd (ASX: STO) share price is down 2.6% to $8.40.
Ampol Ltd (ASX: ALD) shares are down 2.5% to $43.01.
The Brent Crude oil price has fallen another 1% to US$97.12 per barrel today.
The oil price has fallen 8.9% over the past week as oil shipments out of the Middle East increase to near pre-war levels, according to analysts at Trading Economics.
Saudi Arabia has now restored half the capacity of its East-West pipeline, which had been allowing it to bypass the Strait of Hormuz and ship oil out via the Red Sea until a drone strike last month shut it down.
The analysts said the market "remain cautious about the durability of the recovery without a lasting agreement to end the Iran war…"
Meanwhile, an Iranian official said the US had submitted a new proposal to re-open the Strait of Hormuz.
ASX 200 real estate shares are also deeply in the red today, down 2.9%, amid ongoing concern that another interest rate rise may be on the cards either in 2Q or 3Q FY27.
The Goodman Group (ASX: GMG) share price is down 2.5% to $26.51.
The Scentre Group (ASX: SCG) share price is down 3% to $3.40.
The Stockland Corporation Ltd (ASX: SGP) share price is down 3.6% to $4.16.
The Reserve Bank of Australia (RBA) increased the cash rate by 0.25% to a 15-year high of 4.6% on Tuesday due to persistently high inflation.
Data released yesterday showed annual trimmed mean inflation remained at 3.6% for August.
This made experts adjust their expectations for the next rate hike to come in February or March next year, rather than next month, as initially speculated.
Then today, the RBA called on financial institutions to strengthen their crisis plans.
In its monthly Financial Stability Review, the RBA said:
The Review finds that Australia's financial system has a good degree of resilience, but global and operational vulnerabilities continue to mount and reinforce the need for financial institutions to strengthen their ability to withstand shocks.
The RBA highlighted elevated geopolitical threats, growing vulnerabilities in financial markets, advances in artificial intelligence, and critical service provider disruptions.
In this environment, it is important that financial institutions continue to build resilience to financial, operational and geopolitical shocks and that crisis preparedness plans are strengthened.
