* Gold stocks halt 5-day rally
* Tech stocks lead fall, down nearly 2%
* NZ records monthly trade surplus in June
By Arundhati Dutta
July 24 (Reuters) - Australian shares followed Wall Street lower on Friday, with tech stocks leading the fall, while rising COVID-19 cases also weighed on sentiment as the country faces its biggest deficit since World War Two.
The S&P/ASX 200 index fell 1% to 6,033.8 points by 1257 GMT, retreating from Thursday's 0.3% rise.
Restrictions were reintroduced in Australia's most populous state of New South Wales on Friday, as authorities battle to control fresh clusters in Sydney.
This comes after a partial lockdown was enforced and masks were made mandatory in Melbourne, the capital of the second-most populous state Victoria. Australia is currently facing its biggest postwar deficit after rolling out billions in stimulus.
However, the projected 2020/21 budget deficit of A$184.5 billion ($131.40 billion) was smaller than expected, ANZ Research said in a note.
"If further income support is announced, the fiscal deficits will be larger than set out in the update," ANZ warned, adding that further stimulus was more likely than not.
The benchmark mirrored Wall Street's tech-led selloff, with the local tech index losing 1.8%. Heavyweight buy-now-pay-later firm Afterpay lost up to 3.6%.
Gold stocks snapped a five-day winning streak, with Evolution Mining and Alacer Gold Corp falling 6.2% and 4.5%, respectively. However, the sub-index was set for a weekly gain of 4%.
Financial stocks slipped up to 1.1%, with Insurance Australia Group Ltd poised for its worst session in over a month after it warned of a 70% plunge in 2020 cash earnings and scrapped its final dividend.
The energy index lost up to 1.1% after oil prices dropped overnight, but was set for a weekly gain of 1.4%.
In New Zealand, data showed that the country had recorded a monthly trade surplus in June. However, the benchmark S&P/NZX 50 index fell 0.5% to 11,632.37 points. (Reporting by Arundhati Dutta in Bengaluru; Editing by Krishna Chandra Eluri)