Australian shares have had their worst day since mid-March after a re-escalation in the US-Iran conflict dimmed peace deal hopes and boosted oil prices.
The S&P/ASX200 fell 124.8 points on Thursday, down 1.43 per cent, to 8,592.9, as the broader All Ordinaries dropped 125.6 points, or 1.4 per cent, to 8,819.6.
Gold fell to a two-month low and oil surged more than three per cent after Iran's Revolutionary Guard claimed to have targeted a US military base and Kuwait reported intercepting hostile missiles and drones.
The local exchange's two biggest sectors took some of the heftiest losses on Thursday, with basic materials down 2.4 per cent and financials slumping 1.6 per cent by the close.
The Australian dollar is buying 71.17 US cents, down from 71.46 US cents on Wednesday at 5pm.
