Australian shares closed down for the fourth week in a row after the European Central Bank failed to extend its monetary stimulus program and investors sold big bank stocks.
Oil surged higher throughout Friday, giving energy stocks a boost, but the number of companies going ex-dividend this week kept pressure on shares, which traded sideways for most of the week before slumping on Thursday and finishing the week in the red.
The benchmark S&P;/SX 200 Index and the broader All Ordinaries Index each fell 0.8 per cent over the five sessions to end at 5339 points and 5440 points, respectively.
Shares sold off despite GDP data on Wednesday which confirmed Australia's 25 years of uninterrupted economic growth. The Reserve Bank of Australia kept interest rates at 1.5 per cent on Tuesday and the meeting marked the last of Governor Glenn Stevens who will be replaced by Philip Lowe.
Instead it was gathering global gloom that appeared to hold sway over the ASX this week, amid increasingly hawkish US Federal Reserve rhetoric, which US equities largely shrugged off but which led to wobbles on other indices around the world. The local benchmark is now down 4.5 per cent since the beginning of August compared to a 0.5 per cent rally in the S&P; 500.
"It's been a funny time for the market," said Michael McCarthy, senior market analyst at CMC Markets. "Calm on the surface, but boiling below the surface there's been a fair bit of share price movements."
Shares in Origin Energy leapt 5.5 per cent on Friday to $5.41 after new chief executive Frank Calabria, who replaces Grant King, confirmed that he will continue the company' focus on reducing debt and lifting shareholder returns.
Defense and ship builder Austal enjoyed a solid share price lift on Friday following the successful delivery of its second high speed support vessel to the royal navy of Oman. Shares bounced 5.4 per cent to $1.62 on the day.
The market provided plenty of support for Sigma Pharmaceuticals after the company lifted its earnings guidance and reported a solid half-yearly profit figure. The shares climbed 20.6 per cent over the week to close at $1.40.
Healthcare stocks took a battering early in the week, though investors slowly started to claw back losses in Estia Healthcare, which finished up 1.9 per cent to $3.21 for the week. Regis Healthcare and Japara Healthcare however struggled to find momentum and finished the week considerably down, 8.9 per cent to $4.05 and 7.4 per cent to $1.89, respectively.
Oil
Oil prices lifted towards the first weekly gain in three weeks after data showed US stockpiles slumped by the most in 17 years. Brent crude fetched $US49.53 a barrel on Friday afternoon. Oil has been sliding since its August rally, though speculation has increased the Organisation of Petroleum Exporting Countries and Russia might find a production cap later this month in order to stabilise markets.
GDP
Wednesday's local GDP figures showed the economy grew 0.5 per cent in the second quarter and 3.3 per cent over the year, its fastest pace of annual growth in four years. A breakdown of public demand revealed that both government spending and public investment were stronger than usual in the second quarter.
Asian shares
Asian stocks fell the most in a month and regional bonds joined a global debt sell-off after signs that central banks in Europe and Japan are starting to question the benefits of further monetary easing. South Korean equities slid with the won after a nuclear weapons test in North Korea.
AUD
The Australian dollar swung wildly on Thursday night, initially buoyed by better than expected Chinese trade data and the European Central Bank's decision to keep monetary policy unchanged. After hitting a high US77.32¢, the Aussie rapidly lost reversed direction, tracking alongside the euro. One analyst suggested comments by RBA Governor Glenn Stevens may have exacerbated the plunge.
Woolworths
Stock in one of Australia's largest retailers had a rough week, falling 3.4 per cent on Friday to $22.85, it's lowest since mid-July. The drop could be linked to the ongoing court battle with former JV partner Lowe's over the failed Masters hardware chain. The US home improvement chain claimed yesterday it was "stitched up" by Woolworths in a deal to sell Masters stores and sites for around $800 million. It also asked Woolworths to produce almost 20 documents associated with the sale of their home improvement joint venture, including information it claims shows Woolworths had a deliberate strategy to push through the Masters deal and terminate the venture.