SYDNEY, AAP – The ASX200 dipped below 7000 points for the first time since the early stages of the Ukraine war, while the US and European allies discuss banning Russian oil imports.

The Australian market is on a three-day losing streak after commodities shares, which had surged in recent days, fell sharply on Tuesday.

Energy and materials shares lost three per cent but commodity prices remain high as much of the global economy boycotts Russian goods in the wake of the European nation’s invasion of its neighbour.

Brent crude oil rose to $US127.14 per barrel.

The US and its European allies are this week discussing extending their economic sanctions to a boycott of Russian oil.

Russian Deputy Prime Minister Alexander Novak said this would have catastrophic consequences and send prices to more than $US300 per barrel.

City Index senior market analyst Matt Simpson said oil was key to the direction of equity markets.

The sharp rise in price was adding to fears of higher inflation, he said.

The meeting of European leaders later in the week over whether to wean themselves off Russian oil would be pivotal, he said.

The benchmark S&P/ASX200 index closed down 58.3 points, or 0.83 per cent, to 6980.3 points.

The index is about 600 points lower than its record high from August last year.

The All Ordinaries index closed lower by 68.3 points, or 0.93 per cent, to 7252.9 points.

Healthcare and consumer staples proved the best categories and each rose one per cent.

There was better news for the Australian economy after a business survey showed confidence improved in February.

Fewer coronavirus infections helped the economic outlook, although the survey was done before the start of the war in Ukraine.

In company news, Ampol said it had not purchased Russian oil or products since the conflict began.

The company has two Russian cargoes in its supply chain, purchased before the invasion, but said the Australian energy market was not reliant on Russian oil.

Ampol was down four per cent to $28.27.

In the other commodity category, BlueScope Steel plunged eight per cent to $18.99 even as the company continues buying back shares.

Among the larger miners, Fortescue and Rio Tinto each lost four per cent, to $18.66 and $120.51 respectively. BHP shed three per cent to $48.53.

The banking heavyweight stocks were mixed. The Commonwealth Bank was the best performer and rose one per cent to $95.59.

Environmental technology company Calix was higher after gaining regulatory approval for a crop protection product.

The Australian pesticides authority has approved the product, called Booster-Mag, which prevents pests in tomatoes and cucurbits.

Calix was up three per cent earlier but closed lower by two per cent to $6.12.

Fund manager Home Consortium is changing its name to HMC Capital.

The company, which manages two real estate investment trusts, said the name better reflected a diversified asset manager.

Company shares were down one per cent to $6.72.

The Australian dollar was buying 72.84 US cents at 1728 AEDT, lower than the 74.21 US cents at Monday’s close.

ON THE ASX

* The benchmark S&P/ASX200 index closed down 58.3 points, or 0.83 per cent, to 6980.3 points on Tuesday.

* The All Ordinaries index closed lower by 68.3 points, or 0.93 per cent, to 7252.9 points.

* At 1728 AEDT, the SPI200 futures index was down 26 points, or 0.37 per cent, to 6918 points.

CURRENCY SNAPSHOT

One Australian dollar buys:

* 72.84 US cents, from 74.21 cents on Monday

* 84.06 Japanese yen, from 85.20 yen

* 67.07 Euro cents, from 68.12 cents

* 55.54 British pence, from 56.11 pence

* 106.96 NZ cents, from 107.40 cents.