Stocks like ABC Learning Centres, Allco, the big miners like BHP Billiton and Rio Tinto, the banks, especially the National Australia Bank and the Commonwealth, and Macquarie and Babcock and Brown, will be ones to watch, as will property groups like Mirvac, Westfield, Valad and other listed trusts.
Friday saw the NAB hit a three-year low and BHP fell for the first time in four days after a decline in metals prices. The All Ords fell 163 points or 3% to 5,368.90 on Friday, a fall last week of 5.4%, the biggest since December, 1987. The ASX 200 fell 3.2%, for a 5.5% drop over week.
Much of the selling happened in banks and financials for a second week in a row. The financials sub-index of the ASX 200 shed 4.5% Friday and a massive 9.4% for the week, the largest such fall since the ASX 200 index was introduced.
The Dow Jones industrial average slid 146.70 points, or 1.22%, to 11,893.69. The Standard & Poor's 500 Index fell 10.97 points, or 0.84%, to 1,293.37 and the NASDAQ Composite Index dropped just 8.01 points, or 0.36% to 2,212.49. That was the Dow's lowest close since October 2006, and means it has fallen through the previous low set in the week of January 22.
The Standard & Poor's 500 closed at its lowest level since August 2006 and NASDAQ ended at its lowest point since September, 2006. The S&P 500 is now off about 17% from its record closing high set back in October and it's heading for bear country with a 20% or more fall from its peak. For the week, the Dow lost 3%, the S&P 500 shed 2.8% and the NASDAQ was off 2.6%. The fall in our market last week was around double that in the US and a sign of how quickly we have caught up (and probably passed) the US on the way down in the past month.
AMP Capital Investors chief strategist, Dr Shane Oliver said the local share market would open lower on Monday. "The further fall in US share markets on Friday night and futures trading in Australian shares indicates the Australian share market will fall another 90 to 100 points or so on Monday, which will take it below its January 22nd panic low of 5,186 on the ASX200."
European shares ended the week lower as the US employment figures sparked more fears about the health of the world's largest economy and the health of US financial stocks. The pan-European Dow Jones Stoxx 600 index fell 1.1% to 307.98; London's FTSE 100 index closed down 1.2% to 5,699.90; the German DAX 30 index lost 1.2% to 6,513.99 and the French CAC-40 index dropped 1.3% to 4,618.96.
Asian stocks fell, completing the biggest weekly drop since last August, as record home foreclosures and worries about banks and other financial stocks set off fears of rising loan defaults around the world.
Financial stocks led the decline in Asia, with banks in Australia and Japan especially weak. The MSCI Asia Pacific Index dropped 2.6%, taking its loss last week to 5%. It's down 11% so far this year. It was the index's largest weekly loss since August.
Tokyo's Nikkei Index lost 3.3% on Friday to 12,782.80 and 6% over the week, Hong Kong's Hang Seng Index closed down 3.6%, or 841.40 points, at 22,501.33 for a weekly loss of 7.5%.
Singapore's Straits Times Index fell 1.77%, the Philippines index dropped 2.83%, Thai shares lost 0.74%, and Malaysian index was down 0.26% ahead of the weekend election. The Malaysian market will take fright today at the bad result for the ruling UMNO group which has ruled the country for three decades.
Here the NAB lost $1.53, or 5.4%, to A$26.93, its lowest close in more than three years; the CBA fell $1.22 or 3% to $39.35, its lowest close since October 2005.
Investment Bank Macquarie Group fell for a seventh straight day, sliding $1.57, or 3.3%, to $45.43, ending the week down a huge 15%. Imitator, Babcock and Brown plunged $1.54, or 9.9%, to $13.96, the biggest fall in almost two months.
BHP fell 92c, or 2.3% to $38.88, and its target Rio, dropped $4.80, or 3.5%, to $131.20, the lowest in a month. The 3.4 for one BHP offer for Rio is now worth $132.19, so it's 'in the money'.
ABC Learning Centres ended 28c or 16% lower on Friday at $1.47, down 61% since Monday two weeks ago. ABC Learning Centres Ltd founder Eddy Groves sold his entire stake in the childcare empire, but said yesterday that the business is solid despite its financial crisis.
Mr Groves offloaded almost all of his shares - 12 million at $2.14 apiece - after margin calls were made on his holdings last Thursday. He was left with only 3,186 ordinary shares in the company he had built up from a single childcare centre in Brisbane 20 years ago.He returned to Australia on Friday after selling 60% of the company's US assets to Morgan Stanley's private equity arm for $750 million. Yesterday he attended the annual conference of Australian and New Zealand directors in Brisbane and prior to the conference, Mr Groves told reporters he had sold all of his shares. Mr Groves said staff and parents with children in the centres should not link the company's financial crisis to its day-to-day running.
Allco Finance Group ended 10.5c, or 17% lower, to 52.5c as Banks seized 14% of the company's outstanding shares as collateral for unpaid loans. The shares were held by senior management in a listed Trust.
Babcock and Brown Power, the country's biggest listed power group shed 22c to 13% on Friday to $1.51 on concerns that its huge debts are unsustainable. The fall on Friday was the biggest on record.
Consolidated Media Holdings lost 43c, or 10%, to $3.87, almost a dollar under the suggested bid price from James Packer and Lachlan Murdoch. Mr Murdoch is in the US trying to find replacement equity investors for his side of the deal.
Challenger Financial Services Group, 25% owned by Mr Packer plunged 37c or 19% to $1.60, on fears it has too much debt and not enough liquidity. That was the biggest fall on the ASX 200 on Friday.
Toll Holdings, the biggest freight company in the country fell 66c, or 6.6%, to $9.32, its lowest since November 2006.Asciano, the Toll spinoff fell $1.49 or almost 30% to $3.49. Qantas shares dropped 28c to $4.03.
