Australian shares lost ground on Friday as technology stocks were sold off after a hot US inflation reading furthered the cause for a more aggressive approach to raising interest rates, while heavyweight miners limited losses.

The S&P/ASX 200 index fell 0.5% to 7,249.5 by 2328 GMT, snapping a three-day winning streak. The benchmark rose 0.3% on Thursday, and is on course for a 1.7% gain this week.

The technology sector slid 2.8%, tracking an overnight sell-off on Wall Street's tech-heavy Nasdaq Composite Index on the inflation number.

Australia-listed shares of Block Inc retreated 5.2%, while Xero and WiseTech Global shed about 2.9% each.

Australia shares set to open higher, NZ edges up

Separately, Reserve Bank of Australia Governor Philip Lowe again pushed back on calls for a rate hike, saying moving on interest rates too early could put the country's employment goals at risk, and that the board was prepared to be patient.

Insurance Australia Group rose 2.1% on Friday after higher natural peril claims drove its half-year cash earnings down 62% but still beat estimates.

Other financial stocks fell 0.5%, with the country's four largest lenders giving up between 0.2% and 1.1%.

Bucking the sombre mood, heavyweight miners limited losses on the benchmark with their 0.9% climb, led by BHP Group ticking up over 2%, aided by a firm iron ore price.

Rio Tinto and Fortescue Metals Group also added about 1.4% each.

New Zealand's benchmark S&P/NZX 50 index fell 1% to 12,297.81 by 2328 GMT.