Increasing tension between the US and North Korea has sparked a widespread sell-off that has wiped almost $23 billion from the Australian share market.
The benchmark S&P/ASX200 closed 1.18 per cent lower at 5,693.1 on Friday.
Overnight, international equities markets across the board fell as the escalating war of words between the US and North Korea dented confidence, sending investors to safe-haven assets such as gold and US Treasuries.
Wall Street closed sharply lower in Thursday trading, with the S&P500 down 1.5 per cent and Asian markets were all in the red during Friday’s session.
Tension grew after US president Donald Trump refused to step back from his threat to hit North Korea “with fire and fury” or rule out a pre-emptive strike on the rogue nation if it continued to threaten the United States.
North Korea has claimed its considering a missile strike on the US Pacific island territory of Guam, home to a US military base.
Patersons Securities economist Tony Farnham said the geopolitical tension has sparked widespread sell-offs in equities in the US, Europe, Aisa and Australia.
“The fact that Trump has said North Korea better not do anything to US interests and their allies’ interests or ‘you’ll be sorry’ has really upset markets,” he said.
“It has created fear of the uncertain in a market that was otherwise enjoying low volatility – the US volatility index, the VIX, went up 40 per cent overnight.”
The big four banks were all lower led by ANZ which was down 1.91 per cent at $29.26.
NAB, which lifted its third-quarter cash profit five per cent to $1.7 billion, closed down one per cent at $30.17, while Westpac fell 1.3 per cent to $31.61 and the Commonwealth Bank declined 0.7 per cent to $80.50.
Gold-related stocks were well-supported with Newcrest Mining up 2.1 per cent at $21.85 and Evolution Mining up 2.2 per cent to $2.34.
A slump in oil prices, including a 1.5 per cent fall in Brent Crude, hit the major energy producers.
Origin Energy fell 2.1 per cent to $6.88, Santos was down 1.8 per cent to $3.33, Oil Search declined 1.1 per cent to $6.41 and Woodside Petroleum shed 0.6 per cent to $29.02.
In company news, News Corp shares dropped by $1.00, or 5.4 per cent, to $17.40 after the company reported a full-year loss of $US643 million ($A818 million), courtesy of lower ad revenues in its news business, and writedowns of fixed assets at its Australian and UK newspapers and its investment in Foxtel.
REA Group shares fell $4.07 cents, or nearly six per cent, to $64.35 after its full-year net profit slipped 19 per cent to $206.3 million.
Shares in pharmacies supplier Sigma Healthcare plunged 8.1 per cent to 85.5 cents after the company warned that underlying earnings will come in below market expectations.
And prams, cots and car seats retailer Baby Bunting tumbled by 18 per cent, or 35 cents, to $1.60 despite unveiling a 47 per cent lift in its full-year profit.
Baby Bunting cut its dividend and flagged a fall in same-store sales in the first six weeks of its 2018 financial year.
The global risk-off sentiment has driven the Australian dollar lower against the greenback which was trading at 78.62 US cents at 1630 AEST, down from from the 78.80 cents on Thursday.
ON THE ASX:
* At the close, the benchmark S&P/ASX200 was down 67.8 points, or 1.18 per cent, at 5,693.1 points.
* The broader All Ordinaries index was down 67.1 points, or 1.15 per cent, at 5,743.5 points.
* The September SPI200 futures contract was down 63 points, or 1.11 per cent, at 5636 points.
* National turnover was 2.82 billion securities traded worth $5.9 billion.
CURRENCY SNAPSHOT AT 1700 AEST:
One Australian dollar buys:
* 78.58 US cents, from 78.80 on Thursday
* 85.7885 Japanese yen, from 86.63yen
* 66.84 euro cents, from 67.16 euro cents
* 60.54 British pence, from 60.73 pence
* 107.88 NZ cents, from 108.30 cents
The spot price of gold in Sydney at 1700 AEST was $US1,285.47 per fine ounce, from $US1,278.48 per fine ounce on Thursday.
BOND SNAPSHOT AT 1630 AEST:
* CGS 4.50 per cent April 2020, 1.8301pct, from 1.8831pct
* CGS 4.75pct April 2027, 2.5354pct, from 2.6034pct
Sydney Futures Exchange prices:
* August 2017 10-year bond futures contract at 97.415 (implying a yield of 2.585pct) from 97.345 (2.655pct) on Thursday
* August 2017 3-year bond futures contract at 98.08 (1.92pct), from 98.03 (1.97pct).
(*Bond market closes taken at 1630 AEST previous local session. Currency closes taken at 1700 AEST previous local session.)