Australian share prices are expected to remain volatile next week amid security concerns after Britain foiled an alleged airline bomb plot and a flat company reporting season, dealers said.
For the week to August 11 the SP/ASX200 was down 6.9 points or 0.14 percent at 4,956.1, after a roller-coaster week highlighted when the market closed up more than one percent Tuesday to lose all the gains on Wednesday.
AMP chief economist Shane Oliver said the British security scare had spooked investors already displaying caution after an indifferent reporting season, which included Telstra announcing a 26 percent profit slump on Thursday.
Oliver said investors were hoping for better news next week when the companies report, including Qantas, Wesfarmers, QBE and Woodside.
"While the results released over the past week have been less than stellar, we are still expecting the profit reporting season as a whole to deliver strong results," he said.
Oliver said volatility was set to be a feature of the market into the medium term but the market was likely to remain in the 4,900-5,000 point range.
"The next few months are likely to remain rough," he said.
"Inflation and interest rate worries are likely to persist for a while, the oil price is likely to remain under upward pressure until October, and the next few months are likely to find investors fretting about a hard landing in the US," Oliver said.
Market watchers will intensely scrutinise the Reserve Bank of Australia's testimony to a parliamentary committee Friday, including questions about interest rates, which were raised 25 basis points to six percent this month.
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