The Australian share market has snapped its six-day winning streak after a hotter-than-expected US inflation report reignited talk of interest rates staying higher for longer.
The benchmark S&P/ASX200 index on Friday finished 40 points lower at 7,051.0, a 0.56 per cent drop. The broader All Ordinaries fell 43.9 points, or 0.6 per cent, to 7,243.5.
The losses came after the Bureau of Labor Statistics reported that US inflation was unchanged at 3.7 per cent in the 12 months to September, defying expectations for a slight dip.
"The totality of the September consumer price index (CPI) report will reawaken fears that renewed momentum in the economy is leading to some reignition of price pressures," said GSFM investment strategist Stephen Miller.
That suggests another rate hike remains on the agenda, and implies that current Fed thinking doesn't contemplate any rate cuts until the second half of 2024, Mr Miller said. Financial markets had anticipated cuts a little earlier than that.
Equities dropped and the US dollar gained given the expectation of higher US rates, sending the Aussie to a one-week low against the greenback.
A weak auction of US Treasury bonds also led to a rise in yields, pressuring equities.
Nine of the ASX's 11 sectors finished lower on Friday with real estate and tech, which are sensitive to interest rates, both dropping 1.9 per cent.
The heavyweight financial sector fell 0.6 per cent, with losses for all the big retail banks.
NAB dropped 0.8 per cent to $29.32, Westpac fell 0.7 per cent to $21.48, and CBA and ANZ both retreated 0.6 per cent, to $100.97 and $25.71 respectively.
In the mining sector, Newcrest gained 0.8 per cent to $26 as shareholders approved its acquisition by US-based goldmining giant Newmont in a $26 billion all-stock transaction set to become legally binding on Wednesday.
Newcrest chairman Peter Tomsett told shareholders the country's largest goldminer had loved being an Australian champion of the gold industry.
"The reality is that we were made an offer from Newmont we couldn't resist," he said.
Newcrest shares will be delisted from the ASX on October 26 and Newmont's New York Stock Exchange-listed shares will begin trading on the local bourse via a CDI the following day.
Elsewhere in the sector, BHP rose 0.4 per cent to $45.01 and Fortescue added 0.7 per cent to $21.47 while Rio Tinto dipped 0.1 per cent to $114.74.
CSL was up 1.3 per cent to $241.39, rebounding from a steep selloff the day previous.
The blood products giant slumped 6.3 per cent and hit a four-year low on Thursday on fears Ozempic-type drugs could better treat kidney disease than CSL's portfolio of products.
SelfWealth gained 21.4 per cent to a four-month high of 17c after the investment platform said it had knocked back a tentative takeover offer from Stake at 17.5c per share.
For the week the ASX200 rose 96.8 points, or 1.39 per cent, breaking a three-week losing streak.
In foreign exchange, the Australian dollar had fallen to a one-week low against its US counterpart, which rose following the inflation report.
The Aussie was buying 63.19 US cents, from 64.21 US cents at Wednesday's ASX close.
Looking ahead to next week, on Tuesday the Reserve Bank will release minutes from its last meeting, where it left rates on hold.
On Thursday, the Australian Bureau of Statistics will release September jobs data.
ON THE ASX:
* The S&P/ASX200 index finished Friday down 40 points, or 0.56 per cent, at 7,051.0
* The All Ordinaries dropped 43.9 points, 0.6 per cent, to 7,243.5
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 63.22 US cents, from 64.21 US cents at Thursday's ASX close
* 94.60 Japanese yen, from 95.79Japanese yen
* 59.92 Euro cents, from 60.40 Euro cents
* 51.80 British pence, from 52.13 British pence
* 106.74 NZ cents, from 106.76 NZ cents
