Australian shares are poised to fall on Tuesday after renewed US-Iran hostilities and attacks around the Strait of Hormuz rattled global markets, sending oil prices higher and heightening fears over disruption to a key energy shipping route.
Overnight, the S&P 500, the Nasdaq Composite, and the Dow Jones Industrial Average fell 0.4%, 0.2%, and 1.1%, respectively.
In the macroeconomy, Australian services activity edged back into expansion in April as firms increased hiring and output, but persistent inflation driven by higher fuel costs linked to Middle East tensions continued to weigh on new orders and keep business sentiment subdued, according to a monthly survey by S&P Global released Tuesday.
Reserve Bank of Australia's monetary policy decision is due at 2:30 pm Sydney time.
In corporate news, Westpac Banking (ASX:WBC) reported Tuesday fiscal first-half earnings of AU$1.014 per share excluding notable items on net operating income of AU$11.28 billion, compared with earnings of AU$0.998 on net operating income of AU$10.99 billion a year earlier.
Regis Resources (ASX:RRL) agreed to acquire Vault Minerals (ASX:VAU) in a merger of equals to create a major gold producer with a pro forma market capitalization of about AU$10.7 billion.
Australia's benchmark index fell 0.4% or 32.7 points to close at 8,697.10 on Monday.