The Australian stock market lost ground last week, as the dust settled on the historic EU agreement that failed to actually alleviate the underlying debt concerns.

The ASX 200 lost 94 points (-2.2%) to close the week at 4159.

The banking majors weighed heavily on the market; NAB (ASX:NAB) (-2.5%) and Westpac (ASX:WBC) (-2.7%) both recorded losses as they citing tightening margins at their AGM's.

The big miners struggled on the back of extremely weak commodities, BHP (ASX:BHP) declined 1.9%, Rio Tinto (ASX:RIO) tumbled 3%, whilst rival Fortescue dropped 2.5%

The energy sector struggled during the week; Santos (ASX:STO) decreased 1.3%, while rival Woodside gave up 1.9%.

Retails were in the spotlight by the end of the week, after JB Hi-Fi shocked the market when it warned it expects EBIT to be 5% below 1H11.

JB Hi-Fi plunged 18.9%, Myer nosedived 8.7%, whilst rival Harvey Norman did not fare any better for the week, crashing 6.5%.

Supermarket giant Woolworths acted as a defensive and managed to defy the trend with a 2.5% gain.

Economic News: What Does it Mean?

There was a raft of economic news during the week, with trade surplus, business confidence and consumer sentiment data all released.

Figures released by the ABS showed that the trade surplus declined by $654 million in October (from September), which fell short of economists' forecasts.

The surplus last month was a seasonally adjusted $1.6 billion compared to a forecast of $2 billion.

Exports were flat while imports climbed 2%.

Business conditions rebounded in the month of November according to a NAB business survey.

According to the survey the business condition index rose to +1 for the month, after a zero reading in October.

The business confidence index stayed steady at +2.

The Westpac Consumer Sentiment index showed confidence had slumped 8.3% in December, confounding some economist expiations of a rise.

The fall brings the index to 94.7 points, its lowest level since August.

Westpac Chief Economist Bill Evans said that while the drop was surprising, it is not unprecedented for a fall in sentiment after a rate cut.

In the week ahead all eyes will be on the RBA minutes slated for release on Tuesday.

Overseas Market and Commodity Wrap:

It was another horrid week in overseas markets, which moved in sync with any news out of Europe of the US.

Markets had time to digest the EU summit proposals and concluded that the summit's measures won't do much to resolve the underlying problem.

There was an also renewed concern over a potential downgrade in Spanish and French debt.

Some of the worst performers in Europe were the UK FTSE (-2.6%), the German DAX (-4.8%) and the French CAC (-6.3%).

In the US, the Federal Reserve said it will hold its rate structure in place, with no mention of potential QE3 hurting market participants.

There was some good news, with encouraging jobs and manufacturing data, but it was not enough to prevent the Dow (-2.6%), Nasdaq (-3.5%) and S&P 500 (-2.8%) from recorded losses.

Asia was not spared from the carnage; the Hang Seng and Nikkei both dropped 1.6%.

Carnage is also the best word to describe commodities for the week, which were hurt by the possibility of a slowdown in Chinese economic activity. Lead (-9.5%) and Silver (-8.2%) were some of the hardest hit.

Oil and gold both dropped sharply for the week, with a 5.9%, and 6.9% slump, respectively.

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Trading Markets Weekly Commentary: December 19 is a post from: Australian Stock Report Market Pulse Blog