Australian shares fell nearly 2% on Friday, weighed down by heavyweight miners and financials, as risk appetite took a hit on continued fears over inflation and budget wrangling in the United States.

The S&P/ASX 200 index fell 1.7% to 7,216.50 by 0043 GMT, set for its worst week since Aug. 20, and a fourth consecutive weekly decline. The benchmark rose 1.88% on Thursday.

Global stock markets continued to fall, as inflation fears persisted and expectations grew that the US Federal Reserve would tighten policy in the coming months.

Domestic financial stocks fell as much as 2.6%, on track to post their worst session in over 3 months, with the big four banks losing between 1.8% and 2.7%.

Miners fell 1.3%, tracking copper prices lower as power constraints in top consumer China triggered worries over demand.

The heavyweight mining trio, BHP Group, Rio Tinto and Fortescue Metals fell between 1.5% and 2.7%.

Tech stocks fell 0.8%, tracking overnight losses on Wall Street, and were on track for their worst weekly session in over four months. EML Payments, down 2.6%, followed by Megaport, losing 1.8% led losses on the index.

Gold stocks, however, rose 1.8% as bullion prices jumped more than 2% on weaker dollar. AngloGold Ashanti and Geopacific Resources were the top performers on the bechmark, gaining 7% and 6.3%, respectively.

Energy stocks fell 1.9%, with Santos down 3.9%, leading losses, followed by Oil Search, down 3.2%.

Eslwhere, Japan's Nikkei was down 0.3% at 29,360.29, while S&P E-minis futures were up 0.27%.

Across the Tasman sea, New Zealand's benchmark S&P NZX50 index fell 0.4% to 13,225.5.