Australia's share market ended the week on a down note, snapping a three-week winning streak. The S&P/ASX200 closed at 8795.2, up just 0.02 percent on Friday but down 0.13 percent for the week. The broader All Ordinaries fell 0.13 percent to 8905.8. The decline was driven by a sharp drop in raw materials stocks, which have lost nearly 20 percent since late August's record highs.
The sell-off in resource stocks followed a global tech and chip stock downturn, as investors reassessed US tech earnings and the outlook for artificial intelligence in a high inflation, high interest rate environment. BHP shares plunged more than eight percent since Monday to $55.05, while Rio Tinto also suffered as copper prices tumbled. Gold producers were hit hard as spot prices fell to $4023 an ounce, despite easing bond yields.
Oil prices surged, with Brent crude topping $114 a barrel for the first time since early May, adding pressure on inflation and interest rates. The financials sector and consumer cyclicals provided some support, with the latter gaining 2.6 percent on Friday. In company news, NextDC's market value was halved after abandoning its Melbourne data centre expansion due to community opposition.
Analysts noted that while the AI trade has seen a sharp turnaround, valuations are now materially lower than a few months ago. The Australian dollar held steady at 70.12 US cents.