SYDNEY — Australian shares suffered their steepest one-day drop in months on Wednesday, as fresh U.S. military strikes on Iran sent oil prices surging and triggered a global bond market selloff that spooked investors across nearly every sector of the local market.

The benchmark S&P/ASX 200 index closed at 8,978.4 points, down 88.3 points, or 0.97%, marking one of the market's worst sessions in recent months. The broader All Ordinaries index also fell sharply, tracking losses across almost every corner of the market.

Only a small fraction of the 200 companies that make up the benchmark index finished the day in positive territory, with mining and gold stocks bearing the brunt of the selloff while energy producers were among the rare bright spots.

The rout began overnight after the United States launched new strikes against Iran, escalating a conflict that has now stretched into its seventh month. The attacks pushed Brent crude oil prices to a two-month high, reviving fears that higher energy costs could reignite inflation just as central banks around the world had been signaling confidence that price pressures were cooling.

Moomoo Australia chief market strategist Tapas Strickland said the shift in investor sentiment was swift and broad-based.

"The catalyst for the sudden shift in sentiment stems from escalating Middle East tensions following strikes near the Strait of Hormuz, raising immediate concerns over potential bottlenecks in critical global shipping channels," Strickland said. "Higher energy costs risk re-igniting headline inflation just as central banks seek confirmation that price pressures are........

© International Business Times