The ASX 200 fell as investor sentiment weakened and a key US data was released overnight.
Australian shares ended the week lower as investors weighed a weaker economic outlook.
The benchmark S&P/ASX 200 index closed down 54 points, or 0.6 per cent, at 8,420.9, with 10 of the 11 sectors in the red. The index fell 0.2 per cent on the week. It hit a record high of 8,514.5 on Tuesday.
The only sector to see gains was utilities.
The broader All Ordinaries index fell 55.20 points, or 0.63 percent, to close at 8,689.30.
The Australian Stock Exchange (ASX) fell amid a broad market sell-off. Image: NewsWire / Max Mason-Hubers
The Australian dollar fell 0.4% to 64.27 US cents.
AMP chief economist Shane Oliver said sentiment in Australia had weakened since the release of weak GDP data on Wednesday.
“I suspect there has been some profit taking throughout the week after Tuesday’s record high, and the GDP decline and the economic downturn haven’t helped,” Dr Oliver said.
“After last year’s profit decline, the market had been expecting stronger profit growth going forward. The GDP data calls that into question to some extent.”
Australian shares followed Wall Street’s weakness, with the S&P 500 and tech-heavy Nasdaq each down 0.2%, while the more concentrated Dow Jones fell 0.6.
Dr Oliver said there was some important data released overnight that could determine whether the US would cut interest rates again.
“Another issue is that the market is a little nervous about the U.S nonfarm payrolls data as it awaits the Fed’s next rate cut in December,” he said.
Dr Oliver said the ASX was most affected by a fall in financial stocks in Friday’s trading.
Westpac led the declines, falling 1.44 per cent, while Commonwealth Bank fell 0.59 per cent. NAB fell 0.36 per cent, while ANZ was flat
Other consumer discretionary stocks were weak, with former market darling ZIP shares falling 7.37% despite UBS issuing a positive brokerage note on the stock.
Domino’s shares fell 4 per cent to $31.93 after Macquarie Bank downgraded its outlook for the company.
Only utilities were higher on Friday. NewsWire/Max Mason-Hubers
According to the report, the brokerage has downgraded the pizza chain’s stock from neutral to underperform and cut its price target to $29.50.
Macquarie is concerned about store openings as franchisee profits come under pressure. It fears this could lead to lower-than-expected interim earnings.
Dr Oliver said: “Utilities are a defensive sector of the market so it is not surprising that on a day when the market was falling across the board, one key defensive sector was up.
“I would tone down the strength in utilities so they can outperform when the overall market is down.”
Dr Oliver said other defensive sectors of the market, including healthcare and telecommunications, were also lower.