The losses followed a global sell-off, which was fuelled by weaker-than-expected economic data out of the US.
The Aussie market tumbled 101 points (-2.2%) to finish the week at 4583.
Fortescue Metals (FMG) edged higher despite Andrew Forest stepping down as chief executive.
Financials slumped, contributing to the week’s losses. The big banks lost around 3% each with National Australia Bank (ASX:NAB) the worst, down 7.8% after going ex-dividend.
Some of the more defensive sectors performed well with gains in some of the healthcare and telecom stocks.
Foster’s Group (ASX:FGL) was one of the week’s bright sparks, rising 1% on takeover speculation.
Economic News. What Does it Mean?
There were a few key pieces of key economic news released last week, with most eyes focusing on Wednesday’s key GDP figures.
Residential building approvals data for April was released on Tuesday, showing a 1.3% decline from March, whilst the latest RP Data-Rismark survey showed another drop in housing prices across the nation.
The drop in housing prices was focussed primarily at the high end of the market, with Perth recording the biggest decline among the major cities.
Separately, Australia’s current account deficit widened to a seasonally adjusted $10.4 billion in 1Q11, ahead of economist expectations of a $10.0 billion deficit.
The wider-than-expected result came amid a sharp drop in exports, and increases the odds of a weak 1Q11 GDP result tomorrow.
On Wednesday it was revealed that Australia’s economy contracted a smaller-than-expected 1.2% in the March quarter. Still, the GDP result was the weakest since the early 1990’s recession.
The data confirmed the severe impact to exports from the early summer flooding in Queensland.
The hit to exports was due mainly to supply disruptions rather than demand destruction, which bodes well for a healthy economic rebound in the second half.
Thursday saw Australian retail sales data, which showed sales increased 1.1% in May, ahead of economist expectations of a 0.4% gain.
The surprisingly strong result was led by department store sales, which appear to have rebounded from the natural disasters in Victoria and Queensland.
Separately, Australia’s trade surplus unexpectedly narrowed to $1.6 billion in April, from a revised $1.69 billion in March.
Economists were expecting a rise in the surplus to $2.1 billion. A 1% increase in exports was offset by a 1% increase in imports.
Overseas Market and Commodity Wrap:
Global equity and commodity markets struggled last week, as investor confidence took a beating from poor jobs data in the US.
Only a small number of jobs were added across the US last month, suggesting growth in world’s biggest economy is still at a snail’s pace.
All three major US indices slipped 2.3% for the week, with most of the damage done on Wednesday night when initial jobs data missed the mark by a long way.
The jobs data impacted on other key global markets, with the UK market losing 1.4% for the week.
Most Asian sharemarkets logged losses, with the Hang Seng down 0.7% and the Nikkei easing 0.3%. The Aussie sharemarket paced the losses seen the US, dropping 2.2%.
China was a rare winner last week, with the Shanghai Composite closing 0.7% higher after the previous week’s heavy losses.
Most commodity prices lost ground last week, with the exception base metals.
Oil prices were fairly steady, only dropping 0.4% for the week, while gold eked out a 0.3% gain.
Other precious metals put on solid gains, with platinum up 0.8% and palladium surging 3.2%, but silver slumped 3.7%.
Almost all of the base metals closed lower last week. Lead was the worst, down 3.5%, while copper and nickel each dropped more than 1%.