The Australian share market has finished the week on a sour note as persistent inflation has investors worried the Reserve Bank's next interest rate move could be up rather than down.
The benchmark S&P/ASX200 index on Thursday fell 107.1 points, or 1.39 per cent, to 7,575.9, to finish the week up 0.11 per cent.
The broader All Ordinaries closed down 100.1 points, or 1.26 per cent, at 7,837.4.
Wall Street fell overnight after data from the US showed price growth continued to accelerate over the drink.
The US GDP price index accelerated to 3.1 per cent, seasonally adjusted, in the first quarter - a substantial jump from the 1.6 per cent growth in the last quarter of 2023.
The upside surprise led markets to push back the pricing of the Federal Reserve's first interest rate cut from September to November, ANZ economists said.
Meanwhile, lingering inflation prompted Australian investors to ponder the possibility of the Reserve Bank raising interest rates even further, with the domestic money market now pricing in a small chance the RBA board will increase the cash rate before it cuts.
Capital Economics expects the RBA board to raise the cash rate to 4.6 per cent at its next meeting in two weeks.
"Underlying inflation is all but certain to overshoot its current forecast," said Abhijit Surya, ANZ economist at Capital Economics.
"Services inflation, which has long been a concern for the bank, is also proving to be quite persistent.
"Meanwhile, the labour market has largely stopped loosening and green shoots are starting to emerge in the economy."
However, US GDP growth slowed to 1.6 per cent from 3.4 per cent the previous quarter, evoking the spectre of stagflation, in which slowing economic growth teams up with accelerating price growth to torment central bankers.
The March Personal Consumption Expenditures index - the Fed's preferred inflation gauge - is due out later on Friday and should provide the central bank a clearer picture of where the US economy is headed.
Every official ASX sector finished in the red, with real estate stocks the worst hit, down 1.9 per cent.
The index was dragged down by its largest company, BHP, which sank 4.6 per cent to $43.15 after the iron ore heavyweight confirmed it had made a $60 billion bid for British copper miner Anglo American.
The merger would have made BHP the world's biggest producer of copper, with about 10 per cent of existing supply.
However, late in trading, Anglo American said it would reject the offer.
Chairman Stuart Chambers called it "opportunistic" and said it undervalued Anglo American's prospects.
Fellow iron miners Rio Tinto and Fortescue climbed 1.1 per cent and 3.4 per cent, respectively, as the ore's price firmed to a two-week high.
Shares in goldminer Newmont were up 13.9 per cent to $65.70 after it reported an increase in first-quarter revenue, driven in part by record gold prices.
The company announced it had offloaded a $330 million credit facility in Lundin Gold as it looks to monetise non-core assets to help finance its $26 billion acquisition of fellow goldminer Newcrest.
The big four banks all fell, with CBA down 1.8 per cent, NAB slipping 1.4 per cent and Westpac and ANZ 1.9 per cent lower.
Furniture retailer Nick Scali surged 12.7 per cent after completing a $46 million institutional placement to raise funds for its UK growth plans.
Sleep apnoea device producer ResMed climbed 9.6 per cent after announcing a 25 per cent boost to first-quarter profits, driven by increased demand for its products and cost improvements.
Super Retail Group swooned 3.4 per cent after revealing two employees were preparing to launch legal action against the company over claims CEO Anthony Heraghty had an undisclosed relationship with his former HR chief.
The Australian dollar was buying 65.39 US cents, from 65.22 US cents at Thursday's ASX close.
ON THE ASX:
* The benchmark S&P/ASX200 index finished Friday down 107.1 points, or 1.39 per cent, at 7,575.9.
* The broader All Ordinaries dropped 100.1 points, or 1.26 per cent, to 7,837.4.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 65.39 US cents, from 65.22 US cents at Thursday's ASX close
* 102.05 Japanese yen, from 100.73 Japanese yen
* 60.94 Euro cents, from 60.85 Euro cents
* 52.29 British pence, from 52.33 pence
* 109.65 NZ cents, from 109.60 NZ cents.
