Market erases week's gains

Australian shares ended another week of volatile trading back back virtually where they started.

Australian shares ended another week of volatile trading back back virtually where they started.

The ASX 200 index kicked the week off with a 2 per cent spurt on Monday following post-election relief in Greece only to have the rally erased at the week's end by back-to-back daily losses of about 1 per cent on renewed doubts about the health of the global economy.

The CMC Markets chief market analyst, Michael McCarthy, said shares dipped following a series of weak manufacturing readings from Germany, France and China.

"It was really all about concerns for growth," he said. "That's why we saw oil markets hit so hard and that's weighed on shares around the globe including us."

Commodity prices were the main culprits for yesterday's retreat, with the biggest drop in oil futures so far this year sending energy stocks 2 per cent lower.

Oil Search shed 3.5 per cent, while Santos and Woodside both lost about 2.2 per cent.

The ASX 200 share index ended the week at 4048.2, down 39.4 points for the day.

For the week, it was just 0.2 per cent lower, and it's down 0.7 per cent so far this month - underscoring the fluctuating market conditions. The broader All Ordinaries lost 39.9 points on the day, or 1 per cent, to 4093.8 points.

Also dragging on confidence this week were the smaller-than-expected stimulus move by the US Federal Reserve and more signs that China's manufacturing is being hit by softer demand at home and abroad.

While most miners also fell yesterday, Fortescue Metals bucked the trend.

Its shares rose 12?, or 2.5 per cent, to $4.91 after the company lodged a legal challenge to the federal government's mining tax in the High Court.

A constitutional law expert, George Williams, told Weekend Business he "wouldn't be surprised to see other parties attempt to join" Fortescue's challenge.

Even so, BHP Billiton lost 68?, or 2.1 per cent to $31.52. Rio Tinto also slumped, losing 88?, or 1.5 per cent, to $56.02.

Banks fared relatively well despite the decision by Moody's to cut the credit ratings for 15 of the world's biggest banks, including Goldman Sachs, Citigroup, Credit Suisse, HSBC and Deutsche Bank.

In the banks, ANZ ended the day down 30? at $21.28, National Australia Bank was 3? higher at $23.17, Westpac dropped 23? to $20.75 and Commonwealth Bank fell 9? to $51.69.

Qantas shares extended their recent slide, losing another 2? to $1.12, after Weekend Business reported the company had warned MPs in Canberra about the threat posed if rival Etihad were allowed to buy a large stake in Virgin Australia.

That speculation, though, didn't help Virgin on Friday. The carrier dropped another 1.5?, or 3.9 per cent to 37.5?.

Fairfax Media, publisher of the Herald, also ended the week with a fall, losing another 1?, or 1.7 per cent, to 58?.

The company capped a tumultuous week when it announced big job cuts over the next three years, with the poaching of a key executive from rival News.

Fairfax has appointed Sigrid Kirk as the chief product officer for its Metro Media division. Ms Kirk starts from August after leaving News where she was chief product officer for digital - and apparently making the switch despite a phone call from media mogul Rupert Murdoch himself.

National turnover on Friday was 1.7 billion shares worth $3.6 billion, with 288 up, 717 down and 380 unchanged.

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