Australian shares are on track to snap a three-week winning streak as macroeconomic and geopolitical risks put investors on the back foot.
The S&P/ASX200 fell 23.5 points by midday, down 0.27 per cent, to 8769.7, as the broader All Ordinaries dropped 36.7 points, or 0.41 per cent, to 8877.5.
The move followed heavy selling in US tech stocks overnight after a raft of earnings updates from mega-cap names, while ongoing attacks on Middle East Energy infrastructure sent crude prices to five-month highs.
Australian investors were trading hype for caution, Moomoo chief market analyst Tapas Strickland said.
"Money is shifting into safer sectors, such as healthcare, insurers and consumer staples, while riskier tech shares struggle under the weight of global tensions and the massive costs of building artificial intelligence," he said.
"As market volatility rises, protecting capital and backing companies with reliable positive free cash flow are now investors' priority."
Only three of 11 sectors were trading lower by lunchtime, but more than two per cent drops in raw materials and energy stocks weighed heavily, along with a 1.7 per cent drop in IT stocks.
BHP shares dropped to six-month lows of $55.37, following a steep fall in copper on Thursday, while iron ore futures continued to hover just above $US90 a tonne, as Fortescue's stalemate with China's state-backed ore buyer drags on.
Gold stocks also bled lower as the precious metal dipped to $US4024 ($A5736) an ounce, its lowest price since August, while silver fell to 11-month lows of $US54.39 ($A77.48) an ounce.
Investors continued to seek refuge in Australia's recently beaten-down banking stocks, with all big four banks trading higher and propelling the financials sector towards a second week of gains.
Consumer discretionaries rebounded more than two per cent after selling off on Thursday, helped by an even bigger uplift in Bunnings owner Wesfarmers to $79.71 per share.
In company news, Australia Post chief executive Paul Graham has announced he will step down at the end of the financial year, after more than five years in the role.
Rio Tinto has committed $1.9 billion to develop a new bauxite mine in Queensland's Cape York Peninsula, with first production expected in 2029.
Shares in buy-now, pay-later player Zip Co tanked by more than 28 per cent after its quarterly results were hit by a $10 million US fraud event and an increase in bad debts in the US market.
Temple & Webster swung a similar magnitude in the other direction after its strategy update impressed investors, despite the persistently tough environment for consumer retail.
The Australian dollar is buying 70.21 US cents, up from 70.12 US cents on Thursday at 5pm.