Australian shares fell on Friday as investors became risk-averse over Israel's potential retaliation against Iran.

The S&P/ASX 200 Index fell 0.7% or 55.2 points to close at 8,150.00.

There is currently a waiting game happening on the timing of Israel's retaliation against the recent bombing in Iran, with oil prices rising due to supply chain fears, Reuters reported.

"I think we're probably not far away from getting an Israeli response," said IG market analyst Tony Sycamore as quoted by Reuters.

"We know it's coming, it's just creating uncertainty because we don't know what the timing is, and of course we don't know what they've decided in terms of the targets," Sycamore added.

On the domestic front, the Australian Bureau of Statistics said that new housing loans in Australia climbed 1% to AU$30.38 billion in August from AU$30.09 billion in July, while personal fixed-term loans jumped 2% to AU$2.74 billion from AU$2.69 billion.

In corporate news, ANZ Group (ASX:ANZ, NZE:ANZ) reached an agreement to settle two 2020 class actions for AU$99 million in total. The lender's shares closed down by nearly 2%.

It will pay AU$14 million as a settlement for a class action involving the investment of superannuation funds with ANZ, when it owned OnePath Custodians and OnePath Life. Meanwhile, it will pay AU$85 million to settle the Esanda class action involving flex commissions in dealer-arranged Esanda car loans from 2011 to 2016.

HMC Capital (ASX:HMC) confirmed media reports that it is under due diligence to potentially acquire various data center assets, including Global Switch Australia with the terms of any potential acquisitions remain confidential, conditional, and non-binding. The stock ended more than 2% higher.

Platinum Asset Management (ASX:PTM) entered into a non-exclusive mutual due diligence period with Regal Partners (ASX:RPL) for Regal to improve its takeover proposal and for Platinum to assess the costs and benefits of the takeover deal. Platinum rejected Regal's initial proposal last month. The companies' shares each gained 2% at market close.