Australian shares were likely to trade in a tight range in the coming week, as global economic fears make for market volatility, dealers said. The benchmark S&P/ASX 200 eased 75.6 points, or 1.94 percent, over the week to close at 3,828.2.
A national holiday in the United States would mean a quiet start to local trade next week, with commodities markets also likely to have a quiet session, said CMC Markets trader James Foulsham.
"I think we've seen the market move in a pretty tight range over the past couple of months and I think that's going to continue for another couple of weeks," Foulsham told AFP. "There's a fair bit of support for the Aussie market around 3,700, 3,750 (points), I would be surprised in the short term if it goes below that level. It doesn't seem to be able to consistently break through the 4,000 side either so I think we're going to keep bobbing around that kind of range," he added. AMP Capital Investors chief economist Shane Oliver said Australian shares had ended their worst financial year since 1981 this week, and stocks had been shaken by worse-than-expected labour market data from Europe and the US.
"The poor US lead pushed down most Asian and Australian share markets, with the Australian share market being led lower by resources, industrial and financial stocks," Oliver said. "After peaking in the second week of June, shares have been in correction mode ever since." Oliver said worries about rising unemployment, the strength of the recovery, higher oil prices and capital raising would ensure a "volatile ride for shares over the next few months."
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