Australian shares recorded their biggest slump in a week as unexpected soft jobs data dented risk appetite on Thursday while growing US inflationary risks stoked concerns the Federal Reserve will tighten monetary policy sooner than expected.
The S&P/ASX 200 index was down 0.57% at 7,381.9, extending losses for the fourth consecutive session.
Australian employment suffered a shock fall in October as lockdowns continued to plague the labour market, though all signs point to a rapid recovery now that the economy is reopening.
"The main theme on the market is that inflation is probably not as transitory as we're thinking," said Brad Smoling, managing director at Smoling Stockbroking.
"People are looking for security and they're reacting to the high (US) inflation number last night, and that's the main thrust of the market."
Australian financials were down 0.9%, with all major banks clocking losses between 0.1% and 1.6%.
Investor sentiment took a hit as the local currency slid to its lowest in more than a month after a high reading on US inflation sent the greenback soaring.
Investors in energy stocks reacted to the news as shares fell 2%, tracking overnight losses in crude oil prices.
Merger discussions between Oil Search and Santos saw some progress after a Papua New Guinea court permitted investors to vote on the deal. However, shares of both companies closed down 0.9% and 2%, respectively.
Miners were the sole upward pull in the benchmark as they recorded their best session in more than two months, after debt-laden China Evergrande Group was reported to have made a coupon payment to several bondholders.
Fortescue Metals Group was one of the top gainers in the index, marking its highest jump in almost a year.
Gold miners rose 3.6% as US inflationary concerns burnished the bullion's appeal as an inflation hedge.
New Zealand's benchmark S&P/NZX 50 index ended a choppy session flat at 13,026.91.
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