Australian shares pared early gains as investors took profits on the huge rally in Commonwealth Bank shares and rotated into mining stocks.

The S&P/ASX 200 Index rose as much as 0.6 per cent in early trading before swinging lower. The benchmark index closed down 36.6 points, or 0.4 per cent, at 8514.2, with eight of 11 sectors tracking lower.

Still, the Australian sharemarket edged 0.1 per cent higher over the week and sits within striking distance of record levels.

“July is normally a strong month for shares and a break to record highs could be imminent,” said AMP head of investment strategy Shane Oliver. “However, volatility is likely to remain high.”

Investors cashed in on the blistering rally in Commonwealth Bank shares, dragging the stock 2.8 per cent lower to $185.36 on Friday. ANZ, National Australia Bank, and Westpac all fell by nearly 2 per cent.

Traders instead snapped up the major miners as iron ore futures in Singapore rebounded 1.2 per cent to $US94.45 a tonne. BHP rallied 3.9 per cent to $37.53, Rio Tinto rose by 4.6 per cent to $108.97, and Fortescue advanced 3.6 per cent to $15.46.

Lithium stocks enjoyed a second day of gains, buoyed by news on Thursday that Vanguard became a substantial shareholder of PLS (formerly Pilbara Minerals). PLS rose another 4.6 per cent on Friday to $1.38, while IGO climbed 2.7 per cent to $4.12.

Oil was on track to post its biggest weekly decline in two years after a ceasefire between Israel and Iran. Woodside Energy eased 0.6 per cent to $23.72 but Santos added 0.4 per cent to $7.66.

Health stocks were broadly lower, with CSL, ResMed and Sigma all down around 2 per cent.

Stocks in focus

In corporate news, Reece tumbled 18.7 per cent to $14.12 after announcing its earnings for the 2025 financial year were expected to fall in the range of $548 million and $558 million, down from $681 million the year before.

The supplier of bathroom and plumbing products also revealed former NAB chief executive Ross McEwan was retiring from its board.

Breville gained 2.6 per cent to $29.50 after Jarden Securities upgraded its rating on the kitchen appliance maker to “overweight”.

Woolworths, which announced it will close its loss-making MyDeal marketplace just three years after purchasing it, dipped 1 per cent to $31.14. Supermarket rival Coles dropped by 1.7 per cent to $20.82.