Australian shares extended losses on Friday, with the tech index leading the rout as it tracked a weak overnight Wall Street finish after the US Federal Reserve’s rate hike, which was initially cheered by investors, fanned fears of a recession.

The S&P/ASX 200 index fell as much as 2.3% and were headed for their biggest weekly drop in over two years in early trade. The benchmark fell 1.3% on Thursday.

Wall Street and global shares witnessed a broad based sell-off after a series of rate rises from global central banks rekindled fears that aggressive policy tightening could drag economies into recession.

Markets took a breather after welcoming the Fed’s three-quarters of a percentage point rate hike - its biggest since 1994 - but the sentiment was short-lived after central banks in Switzerland and England also tightened policy rates further, again diverting investors’ attention towards a potential economic slowdown as rates rise.

Tech stocks fell 4% and were set for their worst week in over a year.

Australian shares extend fall as investors weigh bigger Fed hike

ASX-listed shares of Block Inc fell 7.2% to lead losses in the sub-index, followed by Novonix which shed 5.4%.

Among individual stocks, GUD Holdings, which was the top loser on the benchmark index, fell as much as 21.8% and was headed for its worst day in over 13 years after the automotive parts maker trimmed its annual forecast.

Miners fell 2.7%, to their lowest level in a month, on weaker iron ore prices.

The big three miners Rio Tinto , BHP Group, Fortescue shed between 3.4% and 4.5% Gold stocks, however, rose 2.4% and were the only gainers among the indices following an uptick in bullion prices.

Heavyweights Newcrest Mining and Northern Star Resources climbed 1.9% and 2.7%, respectively.

New Zealand’s benchmark index S&P/NZX 50 fell 2.4% and hit a more than two-year low.