The S&P/ASX200 fell 112.1 points by midday on Friday, down 1.37 per cent, to 8,818.2, as the broader All Ordinaries lost 119.1 points, or 1.31 per cent, to 9,045.1.
The top-200 is down more than four per cent since Monday, its worst weekly loss since June 2022, when US inflation hit a 30-year high, sparking fears of aggressive interest rate hikes and a potential global recession.
Local miners were hit hardest, the basic materials sector tumbling 4.8 per cent on Friday as oil prices continued to soar, fuelling fears of inflation and weaker global growth.
"Risk sentiment deteriorated overnight, with no signs of an imminent end to the conflict as it enters its sixth day," Westpac economist Ryan Wells said.
"Oil prices continued to surge, impacting price action across other asset classes."
Iron ore giants BHP and Rio Tinto each tumbled more than five per cent on the grim outlook and after China cut its economic growth target to from 4.5 to five per cent, its lowest since 1991.
ASX-listed gold miners were also hammered, as higher energy costs drag on expected margins and inflation concerns reduced the prospects for US interest rate cuts, making the non-yield-bearing precious metal less attractive.
The precious metal had slipped 1.8 per cent since midday Thursday to $US5,080 ($A7,234) an ounce, while names like Northern Star, Evolution, Westgold and Regis Resources plunged five per cent or more.
Critical minerals, copper miners and uranium stocks were a similar sea of red.
Energy stocks were also down 0.7 per cent despite the oil price boost, while Santos offered some support with a 1.1 per cent advance to $7.40.
The heavyweight financial segment dipped 0.4 per cent as all big four banks slipped lower, while insurers were broadly positive as further limited commercial flights from the Middle East resumed.
The conflict is weighing heavily on the airline segment, with Qantas under pressure despite not running direct flights to the region, down more than 11 per cent since the same time last week.
WebTravel is down more than 17 per cent since Monday afternoon.
Australian-listed tech stocks outperformed the broader bourse, with a 3.9 per cent improvement in a broad-based rally.
The move was reflected in digital marketplace owners in the communications sector, with realestate.com.au's REA Group, Seek and carsales.com.au owner Car Group all up 3.6 per cent or more.
In company news, Magellan continues its run higher, up more than 27 per cent since announcing a merger with Barrenjoey on March 2.
While hopes of an early end to the Middle East conflict were fading, it was important to put the oil price move in perspective, IG market analyst Tony Sycamore said.
"Despite crude's almost 20 per cent surge this month, the price is currently just $3.40 above its average over the last four years," he said.
Oil prices remained below the $US100 a barrel level they topped for roughly five months after Russia's invasion of Ukraine, but any price above $US80 a barrel in the weeks and months ahead would still impact local inflation.
"However, with 80 per cent of the world's crude oil still flowing, this rally isn't yet significant enough to send the global economy into recession," Mr Sycamore said.
The Australian dollar was buying 70.21 US cents, down from 70.41 US cents on Thursday at 5pm, as safe haven greenback buying resumed.
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