Australian investors should expect the market's minor correction to continue this week, as slowing global growth raises a question mark over the direction of commodity prices, dealers said.
But while the consolidation of the local bourse may have some way to go, the November to May period was normally very positive for domestic shares, they said.
The benchmark SP/ASX200 ended the week at 5,453.6, up 33.9 points or 0.63 percent on the previous week's close of 5,419.7.
AMP Capital Investors head of investment strategy Shane Oliver said that while the market continued to take a breather after the record high reached on November 7, he foresaw Australian shares making new highs by year end.
There remained an abundance of cash chasing limited stocks as a result of merger and acquisition activity, which had much further to go, he said.
"Australian shares are still cheap, profit growth is likely to remain reasonable, commodity prices should remain high and there is a pile of cash chasing a limited number of shares thanks to (merger and acquisition) activity and strong investor inflows," Oliver said.
He also said company outlook statements flowing from the annual general meeting season had generally had a positive tone.
"The exceptions of course were those exposed to housing, some retailers and media where the advertising market is soft. But beyond these areas, outlook comments have generally been positive and there was little noise about input costs," Oliver said.
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