The S&P/ASX200 fell 66.7 points on Friday, down 0.75 per cent to 8,772.3, as the broader All Ordinaries lost 76.6 points, or 0.85 per cent, to 8,941.5.
The top-200 ended the week 0.28 per cent lower after three days of gains were wiped out with interest in the final session.
Miners, industrials and consumer cyclicals weighed on the exchange after Brent crude prices topped $US100 a barrel for the first time since May as the Middle East conflict expanded to the Red Sea, further fanning global inflation fears.
"Global shares came under pressure again over the last week as the Iran War escalated further with (US President) Trump talking of a 'massive attack', oil prices surged, expectations for central bank rate hikes rose," AMP chief economist Shane Oliver said.
"The Trump Administration announced more tariffs and IT shares were hit again with worries about the sustainability of AI related earnings and valuations, despite strong earnings results."
Basic materials stocks tumbled 2.8 per cent, but managed a 1.7 per cent lift since Monday, after rebounding mid-week on the back of upticks in gold and copper prices.
Gold handed back most of its gains to trade near $US4,035 ($A5,780) an ounce, as price growth fears increased the odds global central banks will be forced to hike interest rates, making non-yielding assets less attractive.
Energy stocks were up almost six per cent since the same time last week, as crude prices supported Woodside, Santos and refinery operators Viva and Ampol.
The heavyweight financials sector helped cap Friday's losses, up 0.9 per cent thanks to decent leads from the big four banks and major insurers, rounding out a fifth straight week of gains for the segment.
Consumer discretionary stocks tumbled for a fourth straight session as concerns about household spending, inflation and interest rates continued to weigh.Â
Staples have traded within a fairly tight range for most of July, caught between dreary sentiment around price growth and the sector's role as a defensive haven.
ASX-listed tech stocks sold off for a third straight week, after disappointing US tech earnings led a sell-off that shook out recent dip-buyers of the beaten down local sector.
Healthcare stocks suffered a similar fate, falling for six straight sessions as the US launched fresh tariffs on 60 trade partners and promised 100 per cent duties on US-bound generic drugs.
Next week will be crucial for Australian macroeconomic data, with June inflation figures due Wednesday, the last data print before the Reserve Bank's August 11 meeting.
Meanwhile, central banks in the US, the UK and Japan will make their funding rate decisions, and while little movement is expected, investors will be watching closely for signals on how they are weighing threats to global inflation.
The Australian dollar is buying 69.83 US cents, down from 70.05 per cent on Thursday at 5pm.
ON THE ASX:
* The S&P/ASX200 fell 66.7 points, or 0.75 per cent, to 8,772.3
* The broader All Ordinaries dropped 76.6 points, or 0.85 per cent, to 8,941.5
One Australian dollar trades for:
* 69.83 US cents, from 70.05 US cents at 5pm AEST on Thursday
* 114.37 Japanese yen, from 114.27 Japanese yen
* 61.33 euro cents, from 61.32 euro cents
* 52.41 British pence, from 52.37 pence
* 120.74 NZ cents, from 120.50 NZ cents
9°C