Australia’s sharemarket traded in the red on Wednesday as US strikes on Iran sent the price of fuel skyward and spooked local traders.

The benchmark ASX 200 pared back a slump during the morning session to close down 18.80 points or 0.21 per cent to 8785.10, while the broader All Ordinaries lost 25.40 points or 0.28 per cent to 8979.30.

The Australian dollar rallied against the greenback to buy 69.36 US cents.

Despite the sharemarket drop, six of the 11 sectors finished in the green, led by energy and consumer staples.

Energy stocks were the big winner thanks to rising oil prices, as Woodside jumped 3.22 per cent to $28.87, Santos rallied 5.78 per cent to $7.50 and Ampol closed 1.37 per cent higher to $34.78.

Consumer staples also climbed as supermarket giant Woolworths jumped 1.22 per cent to $39.90, Coles added 0.39 per cent to $23.41 and liquor and licensed hotel operator Endeavour Group leapt 1.79 per cent to $3.51.

Offsetting the gains were huge slumps in mining companies on falling commodity prices.

BHP shares slumped 2.31 per cent to $57.51, Rio Tinto dropped 2.55 per cent to $163.85 and Fortescue offset the trend as it eked out a 0.11 per cent gain to $18.40.

Reports emerged that the US hit sites along Iran’s coast in air strikes and blocked its ability to sell oil legally on Tuesday in response to Tehran’s recent attacks on ships near the Strait of Hormuz.

US Central Command forces have begun launching a series of powerful strikes against Iran to impose heavy costs for targeting and attacking commercial shipping crewed by innocent civilians in an international waterway,” US Central Command wrote on X.

Iran responded with counter-attacks, according to a senior US official.

These tit-for-tat strikes threaten peace in the region and led to the price of Brent Crude oil back to a two-week high of $US76.58 ($110) a barrel.

The jump in oil prices hit the gold market as investors feared higher for longer global interest rates.

Northern Star Resources fell 1.69 per cent to $20.31, while Evolution dropped 4.19 per cent to $11.44 and Newmont dragged 1.04 per cent to $136.18.

IG senior market analyst Tony Sycamore said the issues around the reopening of the Strait of Hormuz continues as neither side controls the critical waterway.

“Iran maintained that parts of the Strait fall within its territorial waters and that it exercises sovereignty over them, while the US position was that the Strait is an international waterway with rights of transit passage for all nations,” he said.

“This fundamental difference in interpretation was never fully resolved in the text of the agreement.”

Telstra shares slumped 2.96 per cent to $4.92 after the telecommunications giant had an outage across every major city in Australia impacting more than 24.9m mobile services, businesses payments and even shut down the transport network in several states.

Furniture retailer Adairs shares dropped 1.34 per cent to $1,47 as it flagged a non-cash impairment charge of up to $60m, while also announcing it expects a statutory net loss after tax of approximately $43m.

ResMed shares slipped 0.80 per cent to $31.19 after it agreed to sell its MatrixCare software business to Frazer Healthcare partners for $US490m ($707.5m).