Australian shares are set to open lower on Friday after a sharp sell-off in semiconductor stocks depressed Wall Street's benchmark indices.
The ASX 200 is expected to start 0.17% below the previous close, based on Australian Securities Exchange (ASX) futures trading, which priced the September contract of the index 15 points under the prior settlement at 8,784 points at the time of writing.
This positions the Australian equities index to end the week lower, continuing a long period of underperformance compared with the United States market.
The negative tone was set overnight in New York where weakness in the technology sector offset stronger-than-expected corporate earnings results and strong economic data.
The Dow Jones Industrial Average lost 0.2%, and the S&P 500 shed 0.5%, pulled down by computer chip stocks, while the Nasdaq Composite dropped 1.5% on Thursday (Friday AEST).
The increasing dominance of semiconductor (chip) companies in the U.S. equities indices has amplified their influence over broader market performance.
"It comes strictly down to the weight of the chips in the S&P 500," Murphy & Sylvest senior wealth advisor & market strategist Paul Nolte said in a Reuters story.
"Three or four years ago, it was 8%, and now it's over 20%. If you look at the rest of the market, it's doing fine."
The Australian market had ended virtually unchanged on Thursday with the ASX 200 easing 0.40 points to 8,840.7 amid continuing weakness in the mining and energy sector shares.
In fixed interest markets, Australian Government bond yields increased as two year rates rose 0.35% to 4.534% and 10-year rates gained 0.45% to 4.912% at the time of writing.
