After losing 1.4 per cent on Friday, the benchmark S&P/ASX 200 Index and the broader All Ordinaries Index each ended the week 0.5 per cent lower at 5556.4 points and 5569.9 points, respectively.

August got off to a weak start after July came to a close on Thursday with shares up 4.4 per cent for the month. Shares fell while the dollar sunk to a two-month low, in reaction to a global sell-off.

In Europe on Thursday night, concerns about Argentina’s bond default, weakness in the Portuguese banking system, and the impact of sanctions against Russia all hurt sentiment. In the United States, volatility returned as Wall St suffered its worst day since April. The S&P 500 shed 2 per cent after wage costs spiked while corporate earnings results were mixed.

Closely watched US non-farm payrolls data, due out late Friday night Australian time, were expected to show employment steady at 6.1 per cent.

Baillieu Holst partner Richard Morrow is tipping a mini-correction in global equities over the next couple of weeks, but he expects the local market to continue to fare better than the US and Europe as company reporting season meets forecasts.

“Consensus expectations for the ASX200 predict earnings per share growth of between 5 to 10 per cent seem very reasonable,” Mr Morrow said.

But results season delivered yet another early disappointment on Friday as ResMed revealed a fourth-quarter sales slump in its key US market. Shares in the medical device manufacturer dropped 5.8 per cent to $5.23.

Falls in the big four banks led the market lower. Commonwealth Bank of Australia lost 1.1 per cent to $82.82, Westpac Banking Corporation shed 1.6 per cent to $34.05, and ANZ Banking Group fell 1.2 per cent to $33.56. National Australia Bank lost 1.1 per cent to $34.93 as the new chief executive shook up the top executive ranks and vowed to focus the organisation on its domestic and New Zealand operations.

Among other blue-chip industrial stocks Telstra Corporation fell 0.9 per cent to $5.44, Woolworths lost 1.3 per cent to $36.46, and Wesfarmers shed 1.6 per cent to $43.32.

In domestic economic news, the Australian Industry Group’s performance of manufacturing index (PMI) rose 1.7 points to 50.7 in July. The first reading since October above 50, indicating activity is ticking up.

In China the official gauge of factory activity, considered a key indicator of demand for Australian iron ore and coal exports, beat expectations. National Bureau of Statistics data showed the manufacturing PMI posted a 0.7 point rise in July to 51.7 points, against consensus forecasts for a smaller rise to 51.4 points.

The spot price for iron ore, delivered in China, was trading 0.3 per cent lower at $US95.50 a tonne, with Dalian iron ore futures trading tipping a fall in the spot price before the ASX re-opens on Monday.

Resources giant BHP Billiton fell 0.7 per cent to $38.41, while main rival Rio Tinto lost 1.5 per cent to $65.40.

Australia’s biggest oil producer Woodside Petroleum shed 1.4 per cent to $41.92 as a meeting of shareholders concluded with a proposed share buyback from Royal Dutch Shell being rejected.

Kathmandu Holdings was the best-performing stock in the ASX 200, climbing 3.3 per cent to $3.12 as the outdoor adventure gear retailer said it expects a cold July will have helped its sales recover from an unseasonably warm start to winter.

Rare earths miner Lynas Corporation was the worst-performing stock in the ASX 200, dropping 17.7 per cent to 3¢ after the company said on Thursday it faces a looming cash crisis at the end of September unless it can resolve serious funding, pricing and production problems.