Australian shares fell on Monday as collapsed U.S.-Iran peace talks and Washington's move to blockade Iranian ports cast fresh doubt over a fragile two-week ceasefire, souring risk ‌appetite across ⁠markets.

The benchmark ⁠S&P/ASX 200 index fell 0.4% to 8,926 points, marking its steepest intraday percentage decline since April 2.

A U.S.-Iran ceasefire and the prospect of U.S.-Iran negotiations in Islamabad had sent the local benchmark up 4.4% last week. However, the weekend's talks between Washington and Tehran's delegates ended without a deal, while the U.S. military said it will block all maritime traffic entering and exiting Iranian ports and coastal areas on Monday.

Brent crude ⁠futures climbed ‌back above $100 a barrel after the weekend developments, supported by the potential curbing of Iranian oil exports.

"The longer the Strait remains closed, the ⁠greater the supply shock, the larger the drag on earnings, and the stronger the upward pressure on interest rates," said Kyle Rodda, a senior financial market analyst at Capital.com.

"It's a stagflationary mix, which is typically kryptonite for equity prices."

The broader mining sub-index fell 0.4% for a third straight session, dragged down by sharp losses in gold stocks .

Gold miners slumped 2.1%, tracking the bullion, which slipped to a one-week low on a stronger dollar.

Northern Star ‌Resources and Evolution Mining fell 2.3% and 2.9%, respectively.

Financials slipped 0.3%, while tech stocks dipped 1.8%.

Meanwhile, stronger crude prices pushed local energy stocks 2.1% higher with sector majors Woodside Energy adding ⁠2.7% and Santos climbing 1.9%. Telix Pharmaceuticals emerged as the top performer on the benchmark and ended at a five-month high after announcing a radiopharmaceutical collaboration with U.S.-listed Regeneron Pharmaceuticals.

New Zealand's benchmark S&P/NZX 50 index fell 1.2% to 13,020.18 points, dragged by a 12.4% decline in a2 Milk . Shares of the dairy producer closed at an over two-month low after it cut its fiscal 2026 profit guidance and flagged shortfalls in its China-label infant milk formula during the fourth quarter due to supply chain disruptions.