Australian share prices are probably close to the bottom of their current slump on fears about global credit but the decline may not be quite over, dealers said. They said more turbulence could be expected which could drag on for several weeks but the worst of the damage had probably been done.
For the week to August 17, the benchmark S&P/ASX 200 index shed 265 points 4.5 percent over the week after losses of 1.4 percent the previous week.
The market suffered four daily drops in a row but declines were modest compared to some other markets around the Asian region. Shane Oliver, chief economist at AMP Capital, said it was too early to say, whether the turmoil in credit and share markets was over, especially as the August to October period was traditionally weak for share markets.
Further declines should be anticipated, he said. "This suggests that further share market declines are possible and the ride is likely to remain volatile for a couple of months or so.
"However, the bulk of the damage is probably behind us." Oliver said he had predicted a 15 percent decline in markets, which was close to the 14.8 percent decline seen in Australian shares to their low on Thursday.
"Our broad view remains that the current turmoil is just another correction within a rising trend. The Australian and global economies are in good shape, and US weakness is offset by strength elsewhere."
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