Almost A$30 billion was wiped off the value of Australian shares Friday as escalating global risks triggered panic selling. Banks fell 3.2%-4.2% as Spain's banking system came under pressure and Greece's Syriza party leader said the country will repudiate its debts if Europe cuts funding. Also spooking financials, the Wall Street Journal said J.P. Morgan's trading loss could blow out to US$5 billion. BHP Billiton, Rio Tinto and Fortescue dived 4%-5.1% after the Philadelphia Federal Reserve business-conditions index unexpectedly contracted and Goldman Sachs slashed its economic growth forecast for China. Newcrest jumped 3.8% as spot gold rose 2% on safe-haven buying. Leighton, Seven Group and Monadelphous lost 5.2%-7.6% after Caterpillar fell 4.4% on slower sales of heavy machinery. The benchmark S&P/ASX 200 closed down 2.7% at 4046.5, its biggest fall in seven-months, after hitting a five-month low of 4026.5--right on the 61.8% Fibonacci retracement of the August 2011 to April 2012 rally. In Asia, Japan, South Korea and Hong Kong dived 2.7%-3.4%. For the week, the Australian index lost 5.6%, its biggest fall in eight months.

At Friday's low, it was 9.5% below the year's high struck early this month. The fall pushed the index into negative territory for the year to date. Moody's downgraded 16 Spanish banks after the U.S. close, following a night where Spanish lender Bankia fell as much as 30% after Spanish news reports said depositors withdrew EUR1 billion in the past week. Concern about China's growth outlook added to worries about weak U.S. economic data and Europe's ongoing debt crisis after Goldman Sachs slashed its second-quarter GDP forecast for China to 7.9% from 8.5% overnight. The Australian dollar fell to its lowest level since late November on Friday as Asian shares fell after weak manufacturing data in the U.S. and fears of a Greek exit from the euro-zone continued to roil markets. South Korea's Kospi slumped to a five-month low, eliminating all its gains made in 2012. Shares in Tokyo and Sydney were also sharply weaker. The Australian dollar was at $0.9812, down from $0.9945 late Thursday, while against the Japanese yen it was at 77.73 down from 79.90.