Australian share prices are expected to struggle next week if falls in commodity prices continue to weigh on the resources sector, dealers said.
They said the market was surprised mid-week by poor second quarter economic growth figures and while they may make more interest rate hikes unlikely, there is also some concern about the possible impact on corporate earnings.
Recent sharply slower growth figures for the US second quarter add to the more uncertain outlook for the balance of the year.
The benchmark SP/ASX200 ended the week flat at 5,098.3, up just 1.2 points.
Shaw Stockbroking research director Scott Marshall said poor economic growth figures and falling commodity prices were fuelling negative investor sentiment at a time of the year when the share market traditionally struggles.
"Some people may be concerned that there's further falls from this position - it indicates that maintaining a defensive investment strategy is probably the right way to go," Marshall said. The fifth anniversary of the September 11 attacks on the US Monday could also add to investor jitters. The markets will be closely watching any developments in the bid for Coles Myer from a buy-out consortium led by Kohlberg Kravis Roberts.
Coles rejected the initial 14.50 dollars (10.88 US) a share offer and the buyout consortium is yet to respond.
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