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Markets wrap: ASX investors de-risk ahead of another war-afflicted weekend in Eastern Europe

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The Australian sharemarket sagged into the weekend as hopes of a ceasefire between Russia and Ukraine faded and central banks continued to wrestle with mounting inflationary pressures.

The Australian sharemarket eased into the weekend as investors took risk off the table with one eye on the rolling conflict in Eastern Europe.

Any good vibes around a potential thawing of relations between Russia and Ukraine faded fast on Friday, with the benchmark ASX 200 following US and European markets lower to close out the week down 0.7 per cent.

A two session relief rally came to an end on Friday as tenuous hopes of a Russia and Ukraine ceasefire were snuffed out and inflationary pressures once again turned the heat on central banks.

The local bourse fell 67.2 points, or 0.9 per cent, to close a whipsawing week at 7063.6, with riskier sectors such as technology, health care, and payment firms copping a beating.

Zip Co – which released details of its $50 million share purchase plan – fell 7.6 per cent to $1.575, while Afterpay parent Block dropped 3.2 per cent to $146.40.

Blood giant CSL was another prominent casualty with a 2.5 per cent decline to $256.53, while real estate portal REA Group, accounting software firm Xero and tech luminary Wisetech Global each fell heavily.

The broader All Ordinaries dropped 71.6 points, or 1 per cent, to close at 7339.3, while the Australian dollar had edged higher to 73.31 US cents at the local close.

City Index analyst Tony Sycamore noted US stocks had set the tone with a weak lead as geopolitical tensions accelerated the inflation rate to 7.9 per cent in February, the highest since January 1982.

The war in Ukraine has badly exacerbated existing supply chain issues and sent the cost of food, fuel and core commodity prices surging over the past couple of weeks, with traders fearing global growth will suffer as central banks struggle to keep a lid on inflation.

This was a key reason the European Central Bank decided to accelerate the taper pace of its bond buying program, Mr Sycamore said, a move that shocked the market and contributed to a subdued appetite for equities.

Elsewhere, OANDA Asia-Pacific analyst Jeffrey Halley said the Asian region was clearly averse to carrying heavy long exposures into the weekend while the war continues to rage.

“It is no surprise that Asian markets are looking soggy today, or that the US Dollar is bouncing hard,” he said.

“The bad news pouring in isn’t just from the front lines of Kyiv. With that in mind, we appear to be seeing similar price action to last Friday.

“That is, nobody wants to go into the weekend when markets are closed (with) overly long risk exposure.”

The big banks were mixed on Friday with Commonwealth Bank down 0.4 per cent to $99.38 and NAB losing 0.2 per cent to $29.94.

Westpac rose just 0.1 per cent to $22.67 and ANZ improved by 0.3 per cent to $25.85, but Macquarie Group sagged 1.8 per cent to $182.33.

Fund managers were also punished.

Shares in Magellan lost 6.8 per cent to close at $14.20, Pinnacle fell 5.4 per cent to $9.45, Platinum lost 4.1 per cent to $2.09 and Perpetual was 2.1 per cent lower at $33.59.

Local energy and mining stocks were once again at the mercy of a commodity price maelstrom, although most iron ore, lithium and coal producers enjoyed the price benefits associated with sanctions and supply chain ructions.

Lithium firm Allkem gained another 5 per cent to close at $10.59, Pilbara Minerals rose 1.1 per cent to finish at $2.87, Mineral Resources rose 2.7 per cent to end the week at $46.43 and Vulcan Energy climbed 5.1 per cent to $9.44.

Bumper coal prices lifted Whitehaven Coal, New Hope Coal, Yancoal and Coronado but gold softened to just under $US2000 an ounce to leave local precious metals producers in a mixed position.

Iron ore titan Rio Tinto gained 1 per cent to $111.70 but BHP was down 0.1 per cent to $47.69.

Oil companies were also erratic with Woodside Petroleum up 1 per cent to $31.98, Origin rising 1.2 per cent to $5.87 and Beach Energy gaining 0.3 per cent to $1.60, although Santos fell 0.3 per cent to $7.57 and Viva Energy dipped 1.3 per cent to $2.30 as crude prices hovered just below $US110 a barrel.

Retail conglomerates Woolworths, Wesfarmers and Coles all finished in the red and the real estate sector also took a savage weekending hit with Goodman Group, Mirvac, Scentre Group, Vicinity Centres, Stockland and Charter Hall all down.

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