Australia's benchmark S&P/ASX 200 Index fell 35.8 points, or 0.41%, to 8,770.2 by early Monday afternoon, retreating from a positive open as escalating tensions in the Middle East and lingering concerns over the country's growth outlook weighed on sentiment across the local market.

The pullback came despite a bullish start to the trading week. Futures had pointed to a stronger open, with the ASX 200 expected to rise roughly 43 points, or 0.5%, following a solid session on Wall Street Friday, where the Dow Jones Industrial Average rose 0.3%, the S&P 500 climbed 0.4% and the Nasdaq Composite added 0.3%. That early optimism faded as the session progressed, with the index changing direction by midday local time.

The primary driver of Monday's caution appeared tied to a sharp escalation in fighting between the United States and Iran over the weekend. US Central Command said weekend strikes hit approximately 140 Iranian military sites, bringing the total number of targets struck across the week to more than 300, after President Donald Trump ordered the strikes in response to Iranian attacks on commercial shipping. Both sides have continued issuing contradictory claims over whether the Strait of Hormuz, a critical global oil shipping corridor, remains open, a standoff that has kept oil markets on edge and contributed to broader investor caution across Asia-Pacific markets Monday.

Energy stocks were among those expected to see mixed trading as a result. Oil prices had eased slightly Friday night even amid the rising........

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