The Australian market lost ground last week with Europe's growing debt crisis still wreaking havoc on investor sentiment.

The ASX 200 plunged 120 points (-2.8%) to close the week at 4177.

Concerns Europe's crisis will slow the world economy pressured the big resources stocks; Rio Tinto (ASX:RIO) lost 3.4% and BHP (ASX:BHP) declined 4.4%. However Fortescue defied the trend to rise by 0.6%.

The energy majors suffered amid lower oil prices and generally market weakness; Woodside descended 3.7% and Santos (ASX:STO) dropped 4.6%.

Spotless soared higher by 10.0% with a takeover bid coming from Private Equity Partners. The offer was quickly rejected by Spotless management, who described the offer price as too low.

The big four banks weren't exempt from the carnage; NAB (ASX:NAB) was the hardest hit and dropped 4.6% whilst rival ANZ (ASX:ANZ) had 3.1% wiped off its share price.

Retails also had a bad a week, David Jones shed 3.4% and JB Hi-Fi slumped 4.0%. Supermarket giant Woolworths held up better than most to record only a 0.9% decline.

Economics

The RBA's November meeting minutes revealed the decision to cut rates earlier this month was a close call.

The significant and increasing global risks, combined with downwardly revised inflation forecast where the key factors the RBA used to justify the rate cut.

Such a close decision dampened market expectations of another rate cut by the end of a year. Though that's not to say the RBA has entirely ruled out more easing.

With Europe's debt crisis becoming more serious, the central bank may act to ward off a resultant slowdown in domestic economic activity.

Indeed, data last week highlighted only mild inflationary pressures in the economy. The September Wage Price Index (WPI) showed Australian wages rose by 0.7% quarter on quarter and 3.6% from a year earlier.

The average economist forecast before the announcement was for a rise of 0.9% over the quarter. The WPI data for the year does show wages rising above inflation, but not at any problematic level.

Overseas

It was turbulent week for global markets, with the major bourses recording heavy falls due to Europe's growing debt crisis.

After Greece and Italy swore in new leaders, there was hope the two countries would implement austerity measures to get their debt under control.

However the market response was to instead drive up borrowing costs of other eurozone members including France and Spain.

That sparked fears of debt contagion, and saw the Dow (-2.9%), S&P500 (-3.8%) and Nasdaq (-4%) suffer their worst loss for a number of weeks.

In Europe, the declines were even steeper, with the UK FTSE (3.3%), German DAX (-4.2%) and French CAC (-4.8%) logging some of the heaviest falls.

However there were pockets of strength in Asia, with the Shanghai Composite rising 2% for the week amid hopes Chinese authorities will ease monetary policy.

Most commodities were not spared from the punishment, with gold slumping 3.5% and oil giving up 1.3% despite briefly venturing past US$100 a barrel.

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Trading Markets Weekly Commentary: November 21 is a post from: Australian Stock Report Market Pulse Blog