Australian share prices are expected to remain volatile as concerns continue to mount about the US economy, dealers said on Friday. For the week ending February 8, the benchmark S&P/ASX 200 closed the week down 184.9 points or 3.2 percent at 5,658.
AMP Capital Investors chief economist Shane Oliver said Australian share prices had swung one percent or more in 12 of the past 20 session and the roller-coaster ride was set to continue, with the overall trend downward.
"Notwithstanding the occasional bounce, concerns over the US economy, further credit and bank losses flowing from the US mortgage meltdown and falling expectations for future profit growth will keep shares under pressure in the months ahead," he said. "Further falls to new lows are likely."
Oliver said equity markets in Australia and overseas appeared to be entering a period of protracted turbulence. "History tells us that share market volatility tends to rise during the boom, bust and then initial recovery phase in the economic or business cycle," Oliver said.
"Since we are only just into the downturn phase in the global economic cycle its likely that volatility will remain high for a while yet as uncertainty regarding the economic outlook is unlikely to go away anytime soon." Oliver said Australian data for job advertisements, housing finance, business and consumer confidence and employment would be released next week.
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