The benchmark S&P/ASX200 (^AXJO) has finished 0.96 per cent in the red, down 53.40 points to 5,487.00 at close of trade on Friday.
The broader All Ordinaries index (^AORD) also finished down 0.92 per cent to 5,608.70 points.
Smartgroup Corporation had the strongest gains, up 7.59 per cent, while NRW Holdings fell the most, down 9.36 per cent.
While the indexes are in the red on Friday, overall the Australian share market has recorded its fourth week of growth as overall sentiment turns cautiously optimistic.
What happened at midday?
The ASX200 slid lower in midday trade, down 0.55 per cent at 12:34pm AEST.
The All Ordinaries also worsened its losses, down 0.51 per cent.
Chinese markets dove on Friday after the country decided against setting a 2020 GDP growth target. This marks the first time China has not done so since 1990, or the inaugural occasion.
What happened this morning?
Australian share markets softened upon opening of trade on Friday, amid growing US-China trade tensions.
The S&P/ASX200 slid 0.092 per cent to 5,549.30 points at 10:13am AEST today while the All Ordinaries also started the day down 0.012 per cent.
The Aussie dollar was buying 65.62 US cents at 10:14am AEST, down from 65.71 US cents at the close of trade on Thursday.
US President Donald Trump said Washington would respond strongly should Beijing impose national security laws for Hong Kong, with a Chinese official saying in turn that it was ready to escalate the dispute.
Australia’s own relations with China have been strained after Australia pushed for an investigation into the origins of the coronavirus pandemic.
Major Australian retail brand Wesfarmers also announced it would shutter stores before markets opened this morning. Nearly 170 Target stores will either be converted into Kmart stores or close entirely. Wesfarmers said while its businesses remain strong, its Target brand is a drag on the company’s bottom line.
What happened overnight?
Wall Street skidded lower overnight as those US-China trade tensions ramped up.
"It seems like China is going to be used as a punching bag for the upcoming elections," TrimTabs Asset Management chief executive Bob Shea told AAP.
"The White House has resolved to itself that it is more effective to swing at China than to salvage what was going to already be a watered-down Phase 1 trade deal. You don't score any points for that.”
Additionally, new unemployment figures added to traders woes as millions of Americans joined jobless queues.
New research released overnight revealed nearly 39 million Americans have applied for benefits in recent months as the respiratory illness shutters the country.
The Dow Jones Industrial Average fell 0.41 per cent to end at 24,474.12 points, while the S&P 500 lost 0.78 per cent to 2,948.51. The Nasdaq Composite dropped 0.97 per cent, to 9,284.88.