Australian shares dropped more than 1% on Friday and were on track for their worst week in over a year, as the US Federal Reserve indicating that interest rates would remain higher for longer than expected weighed on sentiment.
The S&P/ASX 200 index retreated 1.2% to 6,978.5 by 0038 GMT, set for a fifth session of declines.
For the week, it fell 4.3%, on track for its worst week since June 17, 2022.
Globally, investor sentiment was dampened after the US Federal Reserve earlier this week struck a more hawkish tone than expected and signalled another rate hike this year and more stringent monetary policy through 2024 to fight inflation.
In Australia, focus now shifts to August inflation and retail sales data due next week for insights into how the economy has adjusted to the aggressive rate hikes by the central bank. Heavyweight mining stocks dropped 1.6% in a fifth straight session of declines, on track for their worst day since Sept. 7.
Mining behemoths BHP Group, Rio Tinto and Fortescue fell more than 2%, each.
Rate-sensitive financial stocks retreated 0.8% to their lowest level since Aug. 28. The ‘big four’ banks fell between 0.9% and 2.0%. Energy stocks fell 0.9% to their lowest levels since July 21.
For the week, the sub-index fell 5.6% and was on track for its worst week since March 10.
Australian shares fall on hawkish Fed; NZ inches higher on GDP data
Gold stocks retreated 1.3%, falling for a third straight session, to their lowest level since Sept. 14.
Costa Group Holdings rose 6.4% to become the top gainer on the benchmark index, after the horticulture company said it had entered an agreement to be bought out by a US private-equity firm Paine Schwartz Partners led consortium in a deal valuing it at A$1.50 billion ($962.6 million).
New Zealand’s benchmark S&P/NZX 50 index retreated 0.7% to 11,237.86.
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