The sharemarket slipped backwards for the second week in a row - the first consecutive weekly loss this year.
News of the Cypriot banking crisis dominated the first half of the week; political events in Canberra consumed the second.
For the week, the benchmark S&P/ASX 200 dumped 152.9 points, or 3 per cent, at 4967.3 points, while the broader All Ordinaries index fell 148.5 points, or 2.9 per cent, at 4980.8.
Investors were rattled on Monday when Cyprus grabbed international headlines with pictures of Cypriots queuing to withdraw money from their bank accounts.
The queues were a response to plans by European officials to charge a levy on Cypriot deposit holders to help the country pay for a €10 billion ($12.4 billion) bail-out package.
The news inspired fresh fears, including concerns it could encourage similar scenes in countries such as Spain and Italy. Some market watchers scratched their heads at the fallout, believing Cyprus was too small to worry about.
However, it still led to a rout on global markets on Monday, with the local bourse shedding 2 per cent, and a similar amount being dumped from the US market.
The issue refused to go away, and some analysts were warning that things could worsen on the weekend after Cyprus failed to get agreement with Russia on a rescue loan.
"Longer term ... there may be meaningful consequences arising from the manner in which Europe has attempted to deal with the Cyprus issue," JPMorgan strategist Sally Auld said.
"For markets, we suspect that investors may need to adjust expectations towards a longer and more difficult journey in Europe."
On Thursday, political events in Canberra bedazzled voters when Labor stalwart Simon Crean publicly called for a leadership spill of the Labor government. It was another bizarre chapter in Labor Party history. The fallout continued on Friday when key members of the government's frontbench - who were also supporters of Kevin Rudd as alternative prime minister - retired to the backbench in ignominy.
In financial market jargon, the event meant Australia's "political risk" had just increased dramatically. But that was not reflected in the market, with stocks climbing slightly on Friday, aided by gains in the banks.
The Reserve Bank released the minutes from its recent monetary policy meeting this week. Economists said the minutes suggested we could be nearing the bottom of the Reserve Bank's rate-cutting cycle.
For the week, Billabong International shares gained 5.5¢, or 7.9 per cent, at 75¢, after the troubled surfwear retailer confirmed takeover talks were continuing.
Billabong shares had plunged 20 per cent on Thursday before the company requested a trading halt to investigate the sudden sell-off.
David Jones slipped 5¢, or 1.6 per cent, at $3.02, after supermodel Miranda Kerr severed her association with the department store.
Leighton Holdings slumped $1.50, or 6.9 per cent, to $20.20, as three board members at the construction company stood down after a breakdown in relations with its major shareholder, Hochtief. A shake-up of its board had been a long-time coming amid pressure from Hochtief, analysts said.
Whitehaven Coal shares lost another 6¢, or 2.6 per cent, to $2.19, after the miner said it was laying off 40 workers as it cuts costs to deal with lower coal prices and the high Australian dollar.