Australian shares end lower as bond yields rise on Powell's remarks

By Shriya Ramakrishnan

(Reuters) - Australian shares closed weaker on Friday, dragged down by mining and high-flying tech stocks, as remarks from U.S. Federal Reserve Chairman Jerome Powell failed to calm investors unnerved by the recent bond market volatility.

Wall Street indexes slumped overnight while Asian shares skid to one-month lows in early trade, as bond yields rose after Powell said the increase in U.S. treasury yields were not "disorderly" or one that could lead to intervention by the Fed to bring them down.

The S&P/ASX 200 index ended 0.7% lower at 6,710.8 points. The benchmark index, however, recorded a weekly gain of 0.6%, as strong fourth-quarter gross domestic product data earlier this week boosted hopes of a swift economic recovery.

"Looking forward, we can expect to see more volatility in both bond and equity markets," said James Tao, market analyst at CommSec.

"A lot will depend on whether or not the (Australian) central bank will assure investors about the things they can do in terms of bond-buying programme."

Australian miners fell as much as 3.1% to a near one-month low.

Global miners BHP Group and Rio Tinto dropped 2.2% and 3.3%, respectively.

Leading the decline in the mining sub-index, lithium-boron supplier Ioneer Ltd plunged 13.6% after a discounted share placement.

Technology stocks fell 1.6%, mirroring overnight losses in their U.S. peers. The rise in U.S. bond yields prompted investors to lock in gains on technology-related stocks due to concerns over lofty valuations.

Buy-now-pay-later giant Afterpay, which dropped 2.5%, has shed nearly A$12.5 billion ($9.63 billion) over the past two weeks.

Energy stocks stood out with gains of 2.8%, helped by strength in oil prices after OPEC and its allies agreed to extend output cuts until April.

New Zealand's benchmark S&P/NZX 50 index fell 0.4% to finish the session at 12,180.25 points.

(Reporting by Shriya Ramakrishnan in Bengaluru; Additional reporting by Tejaswi Marthi, Editing by Sherry Jacob-Phillips)