The Australian share market has closed sharply lower amid growing concerns the global economy will suffer a hard downturn and that the cost of capital will rise.
The benchmark S&P/ASX200 index was saturated with red on Friday, falling 119.5 points, or 1.57 per cent, to close at 7473.3. Miners drove the exchange lower, although all sectors were down with the exception of resilient healthcare stocks and a flat consumer staples index.
The poor sentiment is largely tied to signs in the US that the central bank will aggressively raise interest rates to combat inflation, which includes a possible 0.5 per cent rate hike in May.
There are also growing concerns of a steep economic downturn in the US and elsewhere, weighing on stock exchanges around the world.
Asian markets suffered a similar fate to their Australian counterpart on Friday, showing the significance of the US to the global economy.
"Nothing has changed domestically [in Australia] ... the only thing that has changed is the market expectations for the US," AMP chief economist Shane Oliver told AAP.
AMP said in a note that share market volatility is likely to remain high in the short term with the risk of further sharp falls.
The All Ordinaries index fell 118.9 points, or 1.51 per cent, to close at 7768.2 on Friday.
Australia's big iron ore miners led the market lower. BHP shares shed 4.36 per cent to close at $48.49. Rio Tinto closed 2.37 per cent lower.
Oz Minerals disclosed on Friday that copper production had fallen in the March quarter due to bouts of bad weather and the pandemic, prompting a 6.33 per cent fall in its share price to $24.55.
The S&P/ASX200 was on track to hit a new high point this week - the record 7624.8 points was struck in August last year - before Friday's sell-off more than wiped out post-Easter gains.
Healthcare stocks represented a rare bright spot on the exchange, with its index rising 0.54 per cent. Ramsay Health Care, which is subject to a $20 billion takeover led by private equity firm KKR, rose 1.66 per cent to $84.37 on Friday.
Large biotech company CSL, which has been raising money in the US debt market, closed up 1.45 per cent.
The US earnings season was marked this week by the dramatic selldown of shares in Netflix, after the streaming service reported an unexpected decline in first-quarter net subscribers. Its shares lost a further 3.5 per cent in the North American session even after Wednesday's 35 per cent fall.
Meanwhile, foreign exchange traders have been supporting the greenback amid surging 10-year US Treasury note yields.
Higher cash rates - and bond yields - tend to depress share prices over time, as the cost of capital increases and investors switch out of more volatile stocks into the relative safety of government securities.
The high US benchmark yields have been enticing buyers to support the greenback, which has pressured other currencies including the Australian dollar.
The Australian dollar was buying 73.14 US cents at 1700 AEST, compared with 74.44 US cents when the market closed on Thursday.
ON THE ASX
* The benchmark S&P/ASX200 index ended 119.5 points, or 1.57 per cent, lower to close at 7473.3 on Friday.
* The All Ordinaries index fell 118.9 points, or 1.51 per cent, to close at 7768.2.
* At 1700 AEST, the SPI200 futures index was even at 7448 points.
One Australian dollar buys:
* 73.14 US cents, from 74.44 US cents when the ASX closed on Thursday
* 93.59 Japanese yen, from 95.32 yen
* 67.55 Euro cents, from 68.29 cents
* 56.42 British pence, from 56.92 pence
* 109.44 NZ cents, from 109.67 NZ cents.