Australian shares sank to their lowest level in three months on Friday, extending a week-long sell-off triggered by the U.S. Federal Reserve's revision of its interest rate expectations for 2025.
The ASX 200 dropped 101.2 points or 1.2% to close at 8,067.0, marking its weakest point since September. For the week, the index declined nearly 3%.
Friday's losses were led by banks and consumer discretionary stocks, falling 2.4% and 2.5%, respectively.
Commonwealth Bank led the declines, tumbling 3.7%, while National Australia Bank and Westpac fell 2.2% and 1.2%, respectively.
Gold producers also faced headwinds amid lower gold prices as Bellevue Gold tanked 5.6%, Gold Road Resources dipped 1% and Westgold Resources shed 2.7%.
The downturn followed the Federal Reserve's announcement earlier in the week, reducing its forecasted rate cuts for 2025 from three to two. Fed Chair Jerome Powell cautioned that the central bank would take a measured approach to avoid the risk of reinflation, sparking a wave of selling in U.S. markets before a partial recovery overnight on Thursday.
Among individual companies, Biotech firm Mesoblast saw a sharp reversal after soaring earlier in the week. The company plunged 21.5% as investors locked in profits following U.S. regulatory approval for its novel cell therapy.
HMC Capital bucked the trend, rising 3.3% on Friday after earlier losses tied to the tepid IPO of DigiCo, in which HMC holds a majority stake. Despite the gains, HMC shares remain at a two-month low.
On the bond markets, 10-year and 2-year rates lifted to 4.5% and 3.992%, respectively.