Australian shares have dropped by more than one per cent in early trading after US markets were rattled overnight by a record contraction in the world’s largest economy.

The S&P/ASX200 benchmark index was lower by 64.7 points, or 1.07 per cent, at 5986.4 points after the first 30 minutes of trade on Friday.

The All Ordinaries index was lower by 61.5 points, or 1.0 per cent, at 6116.0.

The ASX’s lag comes after US investors turned sour following June-quarter gross domestic product (GDP) data showed their nation’s economy suffered its steepest contraction since the Great Depression.

US jobless claims also rose last week, adding to signs the momentum of economic recovery has slowed since then.

The Dow Jones Industrial Average ended 0.85 per cent lower, the S&P 500 lost 0.38 per cent though the Nasdaq Composite added 0.43 per cent.

In the local market, energy and materials were the hardest hit sectors, down 2.48 and 2.03 per cent respectively, after oil prices sunk on news of the US GDP contraction.

Shares in Origin Energy were down 2.84 per cent to $5.47 after it said fourth-quarter revenue from the Australia Pacific LNG (APLNG) project fell 5.2 per cent as coronavirus-related disruptions hit demand and hurt prices.

Beach Energy, Oil Search, Santos and Woodside all had losses of more than 2.0 per cent.

Big miners followed with BHP dropping 2.27 per cent to $36.97, Rio Tinto down 2.19 per cent to $102.21 and Fortescue lower by 0.57 per cent to $17.45.

The heavyweight financial sector also dragged, lower by 1.34 per cent.

ANZ dropped 0.82 per cent to $18.21, the Commonwealth Bank slid 1.53 per cent to $72.10, NAB fell 1.21 per cent to $17.90 and Westpac was negative by 1.25 per cent to $17.45.

AMP shares added to the decline, sliding 10.42 per cent to $1.50 after the financial services giant said it expects first-half underlying profit to more than halve, ahead of its results next month.

It blamed an increase in bad loans and the volatility of the coronavirus pandemic.

The only sector higher was information technology, up 0.50 per cent, following the lead of US tech giants, which gained overnight.

Shares in Super Retail Group were also a rare bright spot on the market, up by 7.4 per cent to $8.71.

The owner of BCF, Rebel and Supercheap Auto stores said sales were up 27 per cent in June as shoppers returned to stores after coronavirus lockdowns.

Meanwhile, the Australian dollar was buying 72.02 US cents at 1030 AEST, up from 71.53 US cents at Thursday’s close.