After taking a break for the public holiday, the local share market has picked up where it left off - by sinking lower as central bank rate hikes weigh on sentiment.
The benchmark S&P/ASX200 index on Friday closed down 125.5 points, or 1.87 per cent, to 6574.7. The broader All Ordinaries dropped 132.7 points, or 1.92 per cent, to 6788.7.
The losses came after the US Federal Reserve on Thursday issued a hawkish forecast about future interest rate hikes as it raised them by three-quarters of a percentage point for a third consecutive month.
"Market moves were volatile this week. You had the Federal Reserve meeting, you had a large suite of public holidays and then people are out," said Saxo Markets analyst Jessica Amir
"There's limited volume which means big swings in either direction were amplified."
Friday's losses were the worst since September 14 and the fourth losing session the past five, with the ASX200 closing at its lowest level since July 1. The index dropped 2.44 per cent for the week, the fourth time in five weeks it has lost ground.
Still, Ms Amir said the Australian market has been outperforming Wall Street and should calm in the coming weeks.
But on Friday every sector was lower, with the biggest laggards the ones most affected by interest rate hikes.
Consumer discretionary and tech both dropped 4.4 per cent, property dropped 3.6 per cent and utilities were down 3.0 per cent.
All the big retail banks were down with Commonwealth faring worst, dropping 1.9 per cent to $93.64. Westpac dipped 1.4 per cent to $21.42, NAB retreated 1.6 per cent to $29.35 and ANZ 0.9 per cent to $23.38. Macquarie was down 3.1 per cent to $165.57.
The heavyweight mining sector fared the best, dipping 0.5 per cent as the three biggest players gained ground.
BHP added 0.6 per cent to $38.17, Fortescue Metals climbed 1.3 per cent to $16.76 and Rio Tinto was up 1.9 per cent to $93.
OZ Minerals gained 1.7 per cent to $26.50 after making a final decision to go ahead with its $1.7 billion copper-nickel mine in WA after receiving permission from the property's Indigenous landowners.
Coalminers also did particularly well off the back of Russia's "partial mobilisation" policy to support its invasion of Ukraine, which has badly disrupted energy markets.
Whitehaven gained 2.7 per cent to an all-time closing high of $9.20 and New Hope added 2.8 per cent to a similar peak of $6.33.
"Europe is running out of gas and whether they like it or not, they're still dependent on Russia. So this increasing tension has pushed all energy prices higher," Ms Amir said.
Meanwhile, the Australian dollar slipped to a fresh 27-month low against its US counterpart.
The Aussie was buying 66.17 US cents, from 66.72 US cents at Wednesday's close.
Looking forward, Ms Amir predicted the market will still experience some movement next week as investors rebalance portfolios at the end of the month but it will be quieter compared to the past few days.
ON THE ASX:
* The benchmark S&P/ASX200 index on Friday dropped 125.5 points to 6574.7, a fall of 1.87 per cent.
* The broader All Ordinaries dropped 132.7 points, or 1.92 per cent, to 6788.7.
One Australian dollar buys:
* 66.72 US cents, from 66.72 US cents at Wednesday's close
* 94.10 Japanese yen, from 95.85 yen
* 67.53 Euro cents, from 67.31 cents
* 59.07 British pence, from 58.83 pence
* 113.49 NZ cents, from 113.34 cents.