Stocks post biggest weekly retreat in 2012

Stocks post biggest weekly retreat in 2012

Australian shares lost ground, led down by mining and financial stocks, and recorded the worst weekly performance this year as appetite for riskier assets took a hit on US economic and eurozone worries.

The dollar slid closer to parity with the greenback, easing to below $US1.002 in recent trading - it’s lowest point since December 21.

The benchmark S&P/ASX 200 index ended down 0.2 per cent, or 10.5 points, to 4,285.1.

For the week, the benchmark posted a loss of 2.5 per cent, the biggest weekly decline since late November, 2011.

"After a fairly promising start, the local market failed to hold on to the 4,300 level and succumbed to downside pressure shortly after the open," said IG Markets analyst Stan Shamu.

Banking stocks initially led the declines, with investors spooked by news that JPMorgan Chase, the biggest U.S. bank by assets, suffered a trading loss of at least $US2 billion from a failed hedging strategy.


The shock disclosure hit financial stocks and the reputation of the US bank.

"It creates these uncertainties in the market and people at the moment jump at anything, particularly when JP Morgan has been held up as being clean and doing the right thing," said Burrell director Richard Herring.

Australia's big four banks ended off their lows, with the biggest decline posted by Westpac down 0.8 per cent at $22.72.

Investors showed little reaction to Chinese inflation and production data. The annual rate of factory output grew more slowly than expected in April at 9.3 per cent, its weakest pace in three years.

Defensive stocks such as healthcare firms rose, led by blood products maker which ended up 1.4 per cent to $37.97. CSL also got a boost from a fall in the Aussie dollar to near parity.

Among other medical firms, Primary gained 1.8 per cent while bionic ear manufacturer Cochlear rose 0.5 per cent.
Supermarket chains Woolworths and Coles-owner Wesfarmers rose 0.9 per cent and 0.7 per cent, respectively.

Shares in AGL Energy eased 0.3 per cent to $14.50. It said New South Wales planning authorities have approved AGL's application to construct the Newcastle gas storage facility at Tomago, near Newcastle.


Department store Myer was up 0.4 per cent at $2.28, after a newspaper report local importers have reached agreements with international brands to block Australian consumers from overseas web sites selling their clothes more cheaply.


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