Australian shares dropped 1.8 percent on Friday to its lowest close in more than two weeks on growing doubts that European leaders will forge a credible plan to solve the eurozone's debt crisis at a summit due to continue later in the day. The index dropped 1.9 percent for the week, marking its third fall in three weeks as the eurozone crisis hits investor sentiment.
Materials and financial stocks that dominate the index led losses. BHP Billiton was down 3.1 percent and Rio Tinto fell 3.6 percent. The big four banks were all down over 1 percent, NAB was the worst performer of the bunch closing the day 2.4 percent lower. The benchmark S&P/ASX 200 index lost 77.7 points at 4,203.0 according to the latest available data.
Traders expect markets to remain choppy next week as doubts linger over the health of the global economy. "I think, markets have set themselves up for a rather comprehensive solution to the crisis and at the moment it seems like investors are quite underwhelmed by the developments," said Stan Shamu, Market Strategist IG Markets. Shares in Australian wealth manager AMP Ltd outperformed the broader market falling 0.5 percent after saying Mitsubishi UFJ Trust and Banking Corp will buy a 15 percent stake in the funds management unit for A$425 million ($434 million). Australia's Extract Resources bucked the trend to rise 4.7 percent to A$8.47. Its top shareholder Kalahari Minerals agreed to a proposed offer from China Guangdong Nuclear Power Corp (CGNPC) worth $990 million.
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