Feb 6 (Reuters) - Australian shares extended losses on Friday in an index-wide selloff led by miners and banks, while Rio Tinto hit its highest level to date after shelving discussions with Glencore to create what would have become the world's largest mining company.
The S&P/ASX 200 index .AXJO slipped 1.6% to 8,748.50 by 2320 GMT, on track for its weakest session since late November. The benchmark declined 1.3% over the course of the week, set for its largest loss since mid-November.
Mining stocks .AXMM extended losses for the second consecutive day, in tandem with a persistent slump in base and precious metal prices. The sector fell 4.5% over the week, on pace for its steepest decline since early April 2025. IRONORE/ MET/L GOL/
Rio Tinto RIO.AX was an outlier on the sub-index, scoring an all-time high after walking away from takeover talks with London-listed Glencore GLEN.L, the second round of failed discussions in just over a year. The global miner disclosed, after-market hours on Thursday, that the two companies could not strike a deal that delivered sufficient value to shareholders.
The possible deal had been better received by investors in London — where many hold shares in both companies — than in Australia, where Rio is the more popular holding.
Separately, Australia's top central banker said the growth of domestic demand needed to dampen to tame inflation, following the first rate hike in two years earlier this week.
The Reserve Bank of Australia was forced to shift gears and raise cash rates by 25 basis points on Tuesday, in an attempt to bring sticky inflation under control.
Financial stocks .AXFJ declined 1.2%, with top lender Commonwealth Bank of Australia CBA.AX snapping a five-session winning run. While banks tend to outperform in a higher-for-longer interest rate environment, higher rates can put pressure on borrowers' mortgage-paying capacity.
For the week, however, the sector is on track to rise 1.8%, extending gains into the second straight week.
Markets in New Zealand were closed for a public holiday. Over the holiday-thinned week, the benchmark S&P/NZX 50 index .NZ50 marginally gained 0.2%, snapping two successive weeks of losses.
(Reporting by Nikita Maria Jino in Bengaluru; editing by Alan Barona)
((Nikita.Jino@thomsonreuters.com))
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