Technology-related companies dragged the Australian benchmark on Friday, tracking a sharp sell-off among their Wall Street peers overnight following a jump in benchmark US Treasury yields.

The S&P/ASX 200 index fell 2.5% to 6,661 points by 0032 GMT, on the way to its biggest one-day decline since Jan. 28. It was on course for a weekly loss of 1.9%.

"From here, given equities no longer look cheap vs bonds, another leg higher in bond yields could trigger some weakness in certain pockets of the equity market, particularly in rate-sensitive stocks or high growth companies," said Bill Zu, executive director at Goldman Sachs Australia.

Tech stocks dropped as much as 7.2% to an over three-month low, as buy-now-pay-later company Afterpay plunged 11.5% and headed for its worst session in eleven months, a day after it resumed trade and said first-half sales more than doubled.

Wall Street's main indexes tumbled overnight, as rising US bond yields sparked investor concerns over heightened valuations and prompted profit-taking on some high-flying growth stocks.

In Australia, a 27% plunge set Orica on course for its worst session in 33 years as the world's biggest supplier of commercial explosives said a trade spat between Australia and China will hit its sales to thermal coal mining customers.

Miners fell 1.7%, with global miners BHP Ltd and Rio Tinto down 2% and 1.8%, respectively.

Shares of Lynas Rare Earths, however, gained 2.6% after reporting a better-than-expected profit for the half year, as prices of rare earths like neodymium and praseodymium (NdPr) rose.

The financial subindex fell 2%, with all of the "Big Four" banks trading in negative territory.

Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index fell 1% to 12,021.72 points by 0034 GMT.

Cancer diagnostics firm Pacific Edge was the top loser on the bourse.