* Tech stocks drive losses, hit over 3-month low
* Afterpay set for worst day in 11 months
* Orica sees worst day in 33 years after warning of sales hit
Feb 26 (Reuters) - Technology-related companies dragged the Australian benchmark on Friday, tracking a sharp sell-off among their Wall Street peers overnight following a jump in benchmark U.S. Treasury yields.
The S&P/ASX 200 index .AXJO fell 2.5% to 6,661 points by 0032 GMT, on the way to its biggest one-day decline since Jan. 28. It was on course for a weekly loss of 1.9%.
"From here, given equities no longer look cheap vs bonds, another leg higher in bond yields could trigger some weakness in certain pockets of the equity market, particularly in rate-sensitive stocks or high growth companies," said Bill Zu, executive director at Goldman Sachs (NYSE:GS) Australia.
Tech stocks .AXIJ dropped as much as 7.2% to an over three-month low, as buy-now-pay-later company Afterpay APT.AX plunged 11.5% and headed for its worst session in eleven months, a day after it resumed trade and said first-half sales more than doubled. Street's main indexes tumbled overnight, as rising U.S. bond yields sparked investor concerns over heightened valuations and prompted profit-taking on some high-flying growth stocks. .N
In Australia, a 27% plunge set Orica ORI.AX on course for its worst session in 33 years as the world's biggest supplier of commercial explosives said a trade spat between Australia and China will hit its sales to thermal coal mining customers. .AXMM fell 1.7%, with global miners BHP Ltd BHP.AX and Rio Tinto (LON:RIO) RIO.AX down 2% and 1.8%, respectively.
Shares of Lynas Rare Earths LYC.AX , however, gained 2.6% after reporting a better-than-expected profit for the half year, as prices of rare earths like neodymium and praseodymium (NdPr) rose. financial subindex .AXFJ fell 2%, with all of the "Big Four" banks trading in negative territory.
Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index .NZ50 fell 1% to 12,021.72 points by 0034 GMT.
Cancer diagnostics firm Pacific Edge PEB.NZ was the top loser on the bourse.