Oct 21 (Reuters) - Australian shares fell on Friday, dragged down by financial and real estate stocks, in line with overnight Wall Street losses after comments from a U.S. Federal Reserve official reinforced expectations of aggressive interest rate hikes.

The S&P/ASX 200 index fell 0.7% to 6,686.4, as of 0001 GMT. The index is down 1.1% this week, set for its biggest weekly drop in four.

Wall street closed lower overnight despite solid earnings after data on the labour market, as comments from a Fed official bolstered concerns about aggressive rate hikes and potentially tilting the economy into a recession.

In Sydney, heavyweight financials fell 1.6%, their biggest intraday loss since Sept.30, with the country's "Big Four" banks falling between 1.3% and 1.6%.

Wealth manager AMP Ltd was up 0.2%, after it reported that third-quarter net outflows at its Australian wealth management unit more than halved due to increased inflows into its flagship online investment platform, North, and reduced withdrawals at its pension trusts.

Insurance Australia Group fell over 2% after it warned that the company received more than 2,000 claims from New South Wales, Victoria and Tasmania, following heavy floods in the region.

Broader mining and gold stocks inched up 0.1%, each.

Lithium miner Allkem, however, fell 5.8%, after its first-quarter revenue declined due to lower output from its Mt Cattlin operations.

The stock was the top loser on the ASX 200 and was set for its worst session in 3-1/2 weeks.

Real estate stocks fell 1.2%, while healthcare and energy stocks also traded in the red.

In New Zealand, the benchmark S&P/NZX 50 index was flat at 10,829.74.

The country posted a monthly trade deficit of NZ$1.615 billion ($914.09 million) in September, data from Statistics New Zealand showed, while the annual deficit was NZ$11.95 billion. ($1 = 1.7668 New Zealand dollars) (Reporting by Anan Ashraf in Bengaluru; Editing by Rashmi Aich)