The local share market has plunged, with traders rushing to take profits from days of strong gains after weaker-than-expected US economic data raised concerns about the health of the world's biggest economy.
The benchmark S&P/ASX200 index on Friday suffered its worst single-day loss in 16 months, just two days after its biggest rally in 20 months sent it to a new record high.
The benchmark index dropped 171.5 points, or 2.1 per cent, to a one-week low of 7,943.2, while the broader All Ordinaries fell 173.4 points, or 2.08 per cent, to 8,170.4.
For the week, the ASX200 still eked out a 0.28 per cent gain, thanks to its 1.75 per cent rally on Wednesday.
Pepperstone head of research Chris Weston said it was a good, old-fashioned risk off-day in markets, fuelled by seeds planted by the Federal Reserve on Thursday that suggested its models see the US in the late stages of the business cycle.
That led to moves to de-risk overnight after US jobless claims came in above expectations, while US monthly manufacturing data showed its sharpest contraction since November 2023.
The S&P500 dropped 1.4 per cent and the Nasdaq fell 2.3 per cent, while Japan's Nikkei plunged 5.8 per cent, its biggest sell-off since 2020.
Mr Weston said the focus now fell on the monthly US non-farm payrolls report due on Friday night AEST, and poor numbers would not be digested well at all.
Capital.com analyst Kyle Rodda agreed, saying Friday's US jobs report would be crucial for informing whether the American economy remained in the "Goldilocks" zone of moderate growth and moderating price pressures.
AMP chief economist Shane Oliver said there was a risk Thursday's all-time closing high of 8,114.7 would be the high for a while.
"A correction looks to be getting under way," Dr Oliver said.
"Australian shares look vulnerable to further falls suggesting that it's too early to buy the dip just yet."
Every sector of the ASX except for utilities fell at least one per cent, with consumer discretionary and property both falling by 3.0 per cent.
Just 15 of the 200 companies in the ASX200 finished in the green, with another nine flat.
Deep Yellow was the worst performer, with the uranium developer sinking 19.2 per cent to $1.05 after the world's top producer, Kazakhstan’s Kazatomprom, raised production guidance.
Fellow yellowcake plays Boss Energy, Paladin Energy, Bannerman Energy and NexGen Energy all suffered double-digit losses from 10.8 to 13.0 per cent.
NAB was the worst performer among the Big Four banks, dropping 4.1 per cent to $36.50 on its worst day in more than a year.
ANZ fell 1.8 per cent to $28.71, Westpac retreated 2.5 per cent to $28.98 and CBA subtracted 2.8 per cent to $132.46.
In the heavyweight mining sector, Fortescue slid 1.3 per cent to $18.75, BHP dropped 1.2 per cent to $41.98 and Rio Tinto slipped 0.8 per cent to $118.75.
In health care, ResMed dropped 1.8 per cent to $31.80 as the sleep apnoea device manufacturer reported its June quarter revenue grew nine per cent to $US1.22 billion ($A1.88 billion).
Chief executive Mick Farrell dismissed fears a new generation of weight-loss drugs would undercut demand for ResMed products.
The Australian dollar was buying 65.25 US cents, from 65.24 US cents at Thursday's ASX close.
Looking forward, the Reserve Bank meets on Tuesday and is widely expected to leave rates on hold.
ON THE ASX:
* The benchmark S&P/ASX200 index on Friday dropped 171.5 points, or 2.11 per cent, to 7,943.2.
* The broader All Ordinaries dropped 173.4 points, or 2.08 per cent, to 8,170.4.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 65.25 US cents, from 65.24 US cents at Thursday's ASX close
* 97.20 Japanese yen, from 98.02 Japanese yen
* 60.41 euro cents, from 60.35 euro cents
* 51.22 British pence, from 50.96 pence
* 109.49 NZ cents, from 109.77 NZ cents.
