Mining giants BHP (down 1.7 per cent), Fortescue (down 1.1 per cent) and Rio Tinto (down 1.9 per cent) closed weaker on the back of softer iron ore prices as the boost from China’s massive stimulus measures fades.

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Lithium outfit Liontown Resources finished as the worst performer on the index, falling 3.9 per cent, followed by healthcare company Nanosonics (down 3.8 per cent) and mining contractor NRW Holdings (down 3.6 per cent).

The technology sector (down 1.2 per cent) had a poor session, with sector heavyweights – WiseTech Global (down 3 per cent) and Xero (down 0.5 per cent) – closing weaker.

The lowdown

AMP chief economist Dr Shane Oliver said the moves were not big but indicated shares were vulnerable in the short term after their surge in September to record highs.

Sharemarkets would quickly settle down if Israel’s response was proportional and directed at Iranian military facilities, but a strike on Iran’s nuclear facilities, oil production sites or oil-exporting infrastructure could leave equities in for a much bumpier ride, Oliver said.

If the conflict escalated and Iran blocked the Strait of Hormuz, oil could surge back to its post-Ukraine invasion highs of $US120 a barrel, adding 50¢ or more a litre at the petrol bowser for Australian motorists, he said.

Oil prices soared on Thursday, with Brent and WTI futures gaining about 5 per cent each to $US77.48 and $US73.65 respectively, after US President Joe Biden was asked if he would support Israel striking Iran’s oil facilities. “We’re discussing that,” Biden said. “I think that would be a little – anyways.” The White House didn’t respond to requests for comment on Biden’s statement.

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Later, when asked about Biden’s comments, a Pentagon spokeswoman said the US was discussing with Israel “what a response to Iran would look like”.

“It’s more about trying to understand what their response might be,” spokeswoman Sabrina Singh said in a briefing.

On Thursday, the S&P 500 lost 0.2 per cent, The Dow Jones fell 184.9 points, or 0.4 per cent, and the Nasdaq Composite finished flat.

Data released on Thursday showed that the number of Americans filing new applications for unemployment benefits rose marginally last week.

Investors will next focus on the September US non-farm payrolls report to be released on Friday night AEST. Financial markets are eager for more data on the labour market after the Federal Reserve last month cut its benchmark interest rate by an unusually large 50 basis points, the first reduction in borrowing costs since 2020.

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