The benchmark S&P/AS200 index on Friday dropped 34.3 points, or 0.41 per cent, to 8,296, while the broader All Ordinaries fell 36.6 points, or 0.43 per cent, to 8,550.3.
The ASX200 dropped 1.5 per cent for the week, its second-straight losing week and its worst since a 2.1 per cent loss in early August.
AMP chief economist Shane Oliver said traders had been taking profits after a strong run up and amid concerns shares may have run ahead of the likely outlook for earnings in 2025.
Still AMP's assessment was the trend was still up, including for Australian shares, but investors should expect a more volatile and constrained ride over the year ahead.
While December was often a good time for shares, the first half of the month was generally a bit soft before the strength kicked in over the Christmas period, Dr Oliver said.
"But of course, it's not guaranteed," he added.
Nine of the ASX's 11 sectors finished lower on Friday, with energy and financials posting modest gains.
The mining sector was the biggest mover, dropping 1.8 per cent.
Fortescue retreated 3.7 per cent to $19.48, BHP fell 1.5 per cent to $41.17 and Rio Tinto subtracted 2.8 per cent to $120.72 as the miner committed to spending $US2.5 billion ($A3.9 billion) to expand the scope of its new Rincon lithium mine in Argentina.
Goldminers were also in the red as the yellow metal traded for $US2,688 an ounce, with Northern Star dropping 1.9 per cent and Evolution falling 3.6 per cent.
In the financial sector, Insignia Financial rose 6.2 per cent to a two-and-a-half-year high of $3.61 after the wealth manager confirmed it had received a $2.7 billion tentative takeover offer from Bain Capital.
The 178-year-old company formerly known as IOOF Holdings said it was considering whether it was worthwhile to engage with the US private equity firm over its $4-per-share offer.
The big four banks were mixed, with CBA up 0.4 per cent to $158.21 and Westpac adding 0.7 per cent to $32.17 as Australia's oldest bank held its annual general meeting, while ANZ was flat at $29.13 and NAB dipped 0.1 per cent to $37.57.
IRESS was up 7.4 per cent as the financial software company reaffirmed its 2023/24 guidance.
Premier Investments dropped 0.8 per cent to $33.91 as chairman Solomon Lew told the retailer's annual general meeting Black Friday/Cyber Monday sales "while challenging, have not disappointed".
The Australian dollar was buying 63.58 US cents, from 64.18 US cents at close of business Thursday.
ON THE ASX:
* The benchmark S&P/ASX200 index on Friday fell 34.3 points, or 0.41 per cent, at 8,296
* The broader All Ordinaries dropped 36.6 points, or 0.43 per cent, to 8,550.3
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 63.58 US cents, from 64.18 US cents at Thursday's ASX close
* 97.26 Japanese yen, from 97.87 Japanese yen
* 60.78 euro cents, from 61.08 euro cents
* 50.23 British pence, from 50.27 pence
* 110.38 NZ cents, from 110.51 NZ cents
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