Australian shares are poised to fall on Friday as geopolitical tensions in the Middle East ease only tentatively, with markets digesting reports that the US and Iran are exploring a potential ceasefire extension alongside ongoing uncertainty over the Strait of Hormuz and global energy flows.

Overnight, the S&P 500, the Nasdaq Composite, and the Dow Jones Industrial Average rose 0.3%, 0.4%, and 0.2%, respectively.

In the macroeconomy, investors are eyeing the release of the Westpac leading index and the S&P Global flash manufacturing, services, and composite purchasing managers' index reports next week.

In corporate news, Alcoa (ASX:AAI) reported Friday first-quarter adjusted earnings of $1.40 per share on revenue of $3.19 billion, compared with adjusted earnings of $2.15 on revenue of $3.37 billion a year earlier.

Insurance Australia Group's (ASX:IAG) proposed acquisition of RAC Insurance has the potential to substantially reduce competition and therefore necessitates an in-depth phase 2 review, the Australian Competition and Consumer Commission (ACCC) said Friday.

Australia's benchmark index fell 0.3% or 23.7 points to close at 8,955 on Thursday.