Australian shares head for fourth weekly loss on oil-driven inflation fears

Australian shares slipped for a second day on Friday and were heading for a fourth consecutive weekly decline, according to Business Recorder, as higher oil prices revived inflation fears and clouded the outlook for interest rates. The S&P/ASX 200 index was down 0.5% at 8,661.20 by 0010 GMT and set to lose 0.8% for the week.

Middle East tensions and a stalled US-Iran peace process pushed oil above $100 a barrel, weighing on appetite for riskier assets. Persistent inflation, driven by costly energy and heavy data centre spending, has prompted markets to expect another rate increase that would take the cash rate close to its highest level in roughly 15 years, at 4.60%.

Thursday's data unexpectedly showed joblessness climbing to a five-year peak last month, although employment staged a solid recovery, leaving traders still betting on a rate rise. Miners dropped 1%, with BHP and Rio Tinto both at their lowest in about a week, while technology names fell 1.5%. Separately, Insurance Australia Group gained nearly 2% after agreeing to settle a A$2.8 billion lawsuit from Credit Suisse over losses tied to Greensill Capital.