The local share market finished down 0.6 per cent after Federal Reserve chairman Jerome Powell said more interest rate hikes might be needed.
The Australian share market has pulled back from its three-week highs, following hawkish comments by US Fed chairman Jerome Powell.
The benchmark S&P/ASX200 index on Friday finished down 38.4 points, or 0.55 per cent, to 6,976.5, while the broader All Ordinaries fell 38.5 points, or 0.53 per cent, to 7,176.6.
For the week, the ASX200 was basically flat, dropping 1.7 points.
"We lost pretty much all those weekly gains," Eightcap market analyst Zoran Krestovic told AAP, blaming the losses on Mr Powell's remarks.
The Fed chairman told a panel discussion overnight that the US central bank wasn't confident it had hiked rates enough to tame inflation and more increases might be appropriate.
"We know that ongoing progress toward our two per cent goal is not assured: inflation has given us a few head fakes," he said.
"If it becomes appropriate to tighten policy further, we will not hesitate to do so."
The comments led the S&P500 to snap its eight-day winning streak and the US dollar to gain ground, with the Aussie dropping to a 10-day low against the greenback.
Mr Krestovic said that the pullback seemed like an overreaction, given that Mr Powell's remarks weren't very concrete, and might have been caused by profit-taking.
The ASX200 is at a key resistance level, Mr Krestovic added. ""Seven thousand is a big level. If the market can hold well above there, then there might be scope to actually look for 7,300."
On Friday every sector in finished in the red, however, utilities were the biggest laggard, dropping 1.7 per cent.
Origin Energy fell 2.5 per cent to $8.65 as various parties manoeuvred ahead of the November 23 shareholder vote on its pending $16 billion takeover by a private equity consortium led by Brookfield.
All four big retail banks finished in the red, with NAB down 1.7 per cent to $28.46, Westpac down 1.6 per cent to $20.86, ANZ dropping 1.3 per cent to $25.47 and CBA falling 0.8 per cent to $101.32.
In the heavyweight mining sector, BHP gained 0.7 per cent to $45.27, Fortescue climbed 1.3 per cent to $23.75 and Rio Tinto added 0.3 per cent to $120.42
News Corporation's ASX-listed CDIs gained 0.2 per cent to $34.75 after the media conglomerate posted $US2.5 billion ($A3.9 billion) in revenue for the three months ended September 30, a one per cent increase from a year ago.
"We had a sterling start to the new fiscal year, with rising revenues and increased profitability despite difficult economic conditions in some of our markets," chief executive Robert Thomson said.
APM Human Services plunged 20.7 per cent to an all-time closing low of $1.76 after health and human services provider's CEO told its annual general meeting that record-low unemployment rates were affecting client flows into the employment programs it runs for governments in Australia and the UK.
ResMed fell 2.6 per cent to $22.39 as the respiratory product device maker announced a restructuring of its leadership team, with several new roles added and the retirement of current president and chief operating officer Rob Douglas.
In small caps, Pantoro soared 23.1 per cent to a two-month high of 4.8c after agreeing to sell certain mineral rights at its Norseman gold project in Western Australia to Mineral Resources for up to $60 million.
The Australian dollar was buying 63.58 US cents, from 64.12 US cents at Thursday's ASX close.
ON THE ASX:
* The benchmark S&P/ASX200 index on Friday finished closed 38.4 points lower at 6,976.5, a drop of 0.55 per cent.
* The broader All Ordinaries fell 38.5 points, or 0.53 per cent, at 7,176.6.
One Australian dollar buys:
* 63.58 US cents, from 64.17 US cents at Thursday's ASX close
* 96.24 Japanese yen, from 96.82 Japanese yen
* 59.61 Euro cents, from 59.94 Euro cents
* 52.01 British pence, from 52.23 pence
* 107.89 NZ cents, from 108.16 NZ cents.