Australian shares fell sharply on Friday, thanks to plunging commodity prices as oil, gold and copper hit multi-year lows amid expectations the United States will hike interest rates next month. The S&P/ASX 200 index dropped 74.4 points or 1.5 percent to 5,051.3 at the close of trade. The benchmark lost 3.1 percent for the week, and is down 7 percent this year. New Zealand's benchmark NZX 50 index fell 34.9 points or 0.6 percent to finish the session at 5,989.0, down 1.3 percent for the week.
Investors hammered Santos shares for a second day after a A$1.17 billion ($834 million) institutional raising diluted earnings amid falling crude prices. It was last down 7.2 percent. "We've seen big falls in commodities overnight and there is a prospect of higher interest rates in the United States. Overall the market is reacting on the backdrop of a softer global economy," said Julia Lee, market analyst at Bell Direct.
"The next psychological level for the market is 5,000 and we are not too far from that. November tends to be a seasonally weak month but we are expecting to see another rally into December." Global miner BHP Billiton was battered for a third straight day, hitting a 7-year trough, following a fatal dam disaster at a joint venture mine in Brazil. It was last down 3.5 percent at A$19.90.
Rio Tinto was off 2.3 percent, while Fortescue Metals slipped 5.5 percent. Energy-related shares were in the red as well with Woodside Petroleum down 3.4 percent and Origin Energy slipping more than 4 percent. Major banks Commonwealth Bank and ANZ fell over 2 percent each. Westpac was down 1.5 percent while National Australia Bank was off 1.6 percent. New Zealand's benchmark NZX 50 index is still up nearly 8 percent compared with a drop of more than 6 percent for its Australian cousin.