Australian shares ended flat with a negative bias on Tuesday, as Trump urged Tehran residents to evacuate.
The S&P/ASX 200 Index was little changed to close at 8,541.3.
Investor concerns grew as President Trump decided to leave the G7 summit early following the warning for residents to evacuate the city.
It remains unclear whether President Donald Trump was aware of a new wave of Israeli strikes potentially planned for the city, Bloomberg reported.
"Equities have generally been resilient on recent Middle East headlines, which shows that the market understands that past instances have generally been contained and short-lived," said Billy Leung, senior investment strategist at Global X ETFs.
On the domestic front, Australian consumer confidence slipped below its year-to-date average last week amid rising geopolitical tensions and inflation fears driven by oil prices.
In company news, CSL (ASX:CSL) said the US Food and Drug Administration approved its hereditary angioedema drug, Andembry, for immediate launch in the US.
Rio Tinto (ASX:RIO) and BHP Group's (ASX:BHP) proposed Arizona-based joint venture, Resolution Copper, received environmental approval from the US Department of Agriculture.
Lastly, The Treasurer of Australia Jim Chalmers said that he would "listen very closely" to advice from the Foreign Investment Review Board (FIRB) if the acquisition of Santos (ASX:STO) by a consortium led by a unit if Abu Dhabi National Oil moves forward, according to a transcript of an interview published by the Australian Treasury.
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