The local share market has closed slightly lower after a US inflation readout came in slightly higher than expected, casting doubt on the prospect of quick rate cuts this year.
The benchmark S&P/ASX200 index moved in and out of negative territory all day on Friday, finally finishing down 7.7 points, or 0.1 per cent, to 7,498.3.
The broader All Ordinaries dropped 6.3 points, or 0.08 per cent, to 7,730.5.
For the week, the ASX200 rose 9.2 points, or 0.12 per cent, after alternating each of the past five days between gains and losses.
Overnight the US Labor Department reported US consumer prices rose 0.3 per cent in December, up from the 0.2 per cent monthly increase that was expected, undercutting the case for the US rate cuts that some have been expecting as soon as March.
AMP chief economist Shane Oliver said stocks rose too far, too fast late last year, leaving them vulnerable to a short-term correction.
"The extent of the rally has left shares overextended and vulnerable to a pullback as central banks may not start to cut rates as early as markets are assuming, the risk of recession remains high and the creeping widening in the Israel/Hamas conflict poses a risk to global growth and inflation," Dr Oliver wrote.
The ASX's 11 sectors finished mixed on Friday, with three gaining ground, six losing it and consumer discretionary and real estate basically flat.
Consumer staples was the biggest mover, dropping 1.2 per cent, as Coles fell 2.1 per cent and Woolworths retreated 1.5 per cent amid mounting pressure for a federal government inquiry into rising grocery prices.
The energy sector finished up 0.5 per cent after the US and Britain began air strikes against the Iran-backed Houthi rebels in Yemen that have been disrupting international shipping in the Red Sea, pushing Brent prices close to a two-week high of $US79
Santos gained 1.5 per cent, Woodside climbed 0.5 per cent and Beach Energy rose 3.0 per cent.
Uranium developers kept on surging amid soaring yellowcake prices, with Boss Energy rising 5.0 per cent to an all-time high of $5.09 and Bannerman Energy up 5.6 per cent to a two-year high of $3.38
The Big Four banks were mostly lower, with ANZ dropping 0.6 per cent to $25.90, Westpac and NAB both falling 0.2 per cent - to $23.19 and $30.91, respectively - and CBA basically flat at $113.63.
In the heavyweight mining sector, Fortescue added 1.2 per cent to $27.37 and Rio Tinto rose 0.6 per cent to $129.15, while BHP edged 0.2 per cent lower at $47.71
JB Hi-Fi climbed 2.0 per cent to an all-time high of $57.86, finishing the week up 9.8 per cent from where it began amid signs of a rebound in consumer spending.
Rebel sports owner Super Retail Group rose 3.0 per cent, Myer climbed 1.6 per cent and Adairs added 1.1 per cent.
The Australian dollar was buying 67.02 US cents, from 67.22 US cents at Thursday's ASX close.
ON THE ASX:
* The benchmark S&P/ASX200 index on Friday dropped 7.7 points, or 0.1 per cent, at 7,498.3
* The broader All Ordinaries fell 6.3 points, or 0.08 per cent, to 7,730.5
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 67.02 US cents, from 67.22 US cents at Thursday's ASX close
* 97.27 Japanese yen, from 97.74 Japanese yen
* 61.05 Euro cents, from 61.18 Euro cents
* 52.46 British pence, from 52.63 pence
* 107.35 NZ cents, from 107.47 NZ cents
