The S&P/ASX200 fell 61 points on Friday, down 0.7 per cent, to 8,625.1, as the broader All Ordinaries also lost 61 points, or 0.68 per cent, to 8,855.9.
The top-200 has lost 1.2 per cent since Monday and ended the week with a relatively uneventful session, trading in a narrow range after some initial weakness at the open, Global X senior investment strategist Billy Leung said.
"Materials were the biggest drag on the index as commodity-linked stocks came under pressure, while financials also weighed on performance following cautious commentary around the banking sector and housing outlook," Mr Leung said.
"Given these two sectors account for more than half of the Australian market, they were responsible for much of the day's decline."
Iron ore futures have fallen in value for the past four weeks, from around $US112 per tonne to $US102 on Friday, amid rising supply and softening steel demand.
The slump weighed on BHP and Rio Tinto, which retreated from their record-breaking runs and as copper prices fell more than four per cent in two sessions.
Gold miners also sold off as the precious metal fell to $US4,445 ($A6,245) an ounce, while rare earths and battery minerals producers also lost ground.
The financials sector has fallen for seven of the past weeks and heads into the weekend at its lowest Friday close since December.
Energy stocks also slumped on Friday, as Brent crude prices hovered near $US95 a barrel, as uncertainty hangs over the Persian Gulf energy crisis, and peace talks marred by further fighting in the region this week.
"Financial markets, though, seem to have moved on from deal-watching," AMP deputy chief economist Diana Mousina said.
"The working assumption is that an agreement happens eventually, and in the meantime, investors are refocusing on what they can actually measure - underlying economic data and company profits – both of which are holding up well."
While major US indices have hit multiple new highs since Monday, local investors appear to be cautious, as defensive sectors health care, consumer staples and utilities clocked consecutive weeks of gains.
Interestingly, IT stocks also had a stellar week, the segment up 7.6 per cent since Monday as traders picked up data centre plays and sought bargains in beaten-down software stocks.
In company news, Megaport outperformed the market on Friday, surging more than 11 per cent after completing a $518 million equity raising to fund an investment in Nvidia chips for its artificial intelligence push.
Insurer Nib gained 2.5 per cent after selling a large portion of its Australian and New Zealand distribution portfolio to Allianz for $50 million.
The Australian dollar is buying 71.25 US cents, down from 71.35 US cents on Thursday at 5pm, the Aussie under pressure from softening risk sentiment and commodity prices.
ON THE ASX:
* The S&P/ASX200 lost 61 points, or 0.7 per cent, to 8,625.1
* The broader All Ordinaries fell by by 61 points, or 0.68 per cent, to 8,855.9
One Australian dollar trades for:
* 71.25 US cents, from 71.35 US cents at 5pm AEST on Thursday
* 113.95 Japanese yen, from 114.09 Japanese yen
* 61.30 euro cents, from 61.46 euro cents
* 53.03 British pence, from 53.14 British pence
* 121.43 NZ cents, from 121.55 NZ cents
9°C