Global market sell-off hits ASX over fears of drawn-out Middle East war | The Business | ABC NEWS

Investor fears of a drawn-out Middle East war, surging oil prices and potentially higher inflation are hitting Australian shares, with the ASX finishing almost 2 per cent down, after stronger-than-expected economic growth fuels interest rate hike speculation.

Earlier, Wall Street managed to claw back most of its losses after Donald Trump said the US would protect oil tankers in the Strait of Hormuz.

It comes as Australia's economy grows at the fastest pace in almost three years. Data from the December quarter shows GDP was 0.3 per cent and 2.6 per cent over the year. Economists say the rate is faster than the economy can handle without overheating and pushing inflation higher. The likelihood of the Reserve Bank lifting interest rates in coming months is high, and the outbreak of fighting in the Middle East has complicated the outlook for growth and inflation.
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