Australian shares fell on Friday, dragged by plunging shares of Beach Energy after it said reserves at its oilfields in the country were drying up, with losses in gold stocks also weighing on the benchmark index.

The S&P/ASX 200 index dropped 0.6% to 7,042.1 by 0018 GMT, moving away from a 14-month high it hit on Thursday.

Beach Energy Ltd was the top percentage loser with a drop of over 20%. The oil and gas producer downgraded its annual production forecast and said it would review its reserves at Western Flank after output declined there.

Beach also dragged the energy sub-index 1.3% lower despite oil prices rising overnight.

Keeping losses in check were shares of top percentage gainer Mesoblast, as they jumped nearly 9% after trial data showed the company's drug reduced mortality in COVID-19 patients under the age of 65.

Shares of Beach Energy and Mesoblast were the most-heavily traded by volume.

Gold stocks fell 2% after the bullion dropped overnight on rising US Treasury yields. Leading the losses was West African Resources Ltd, down 4.6%, followed by Ora Banda Mining Ltd, dropping 4.3%.

Financial stocks slid 0.4%. Australia and New Zealand Banking Group lost 0.3% after it warned of a profit hit in the first-half from its exposure to Malaysia's 1MBD scandal.

Tech stocks fell 0.9% and miners lost 1.3%.

In other markets, Japan's Nikkei was down 0.5% at 28920.3, while S&P 500 E-minis futures fell 8.25 points, or 0.2%.

In New Zealand, the benchmark S&P/NZX 50 index fell 0.08% to 12,704.7.