ASX dives, worst week in 15 months

Blurred image of an ASX trading display.
The ASX crashed to its second-steepest loss of the year. -AAP Image

Stocks on the Australian market had their second-steepest fall of the year as investors panic about the likelihood of higher interest rates.

The market closed lower by 2.27 per cent on Friday and every share category was down. 

The ASX lost almost three per cent this week - its worst performance in 15 months.

The performance comes prior to a US Federal Reserve meeting next week to consider rates and surging inflation.

The benchmark S&P/ASX200 index closed down 166.6 points, or 2.27 per cent, to 7175.8 points.

The All Ordinaries index closed lower by 178.8 points, or 2.33 per cent, to 7490.1 points.

The Australian dollar was buying 71.86 US cents at 1620 AEDT, lower from 72.31 US cents at Thursday's close.