Australian share prices are expected to continue a downward slide as concerns about a US slowdown intensify and the global credit crunch continues to bite, a dealer said. For the week ending March 7, the benchmark S&P/ASX 200 plunged a massive 308.1 points or 5.9 percent to 5,264.0.
AMP Capital Investors chief economist Shane Oliver said Australia and global share markets were showing signs of "panic," meaning the bear market was unlikely to end soon.
"The key driver remains ongoing recession worries in the US amid a continuing deterioration in credit markets all made worse by news that US mortgage foreclosures are running at record levels," he said.
Oliver said he expected the benchmark Australian index to bottom out at about 5,000 points. "The news on the US/global economy will likely get worse before it gets better, credit markets are continuing to deteriorate and we are yet to see the sort of investor capitulation that marks the end of bear markets," he said.
"Australian shares are also likely to be weighed down by high local interest rates and the strong Australian dollar. "It's quite likely the local market will see 5,000 on the S&P/ASX 200 before it all turns back up again on a sustainable basis."
Oliver said data due for release next week included housing finance, consumer confidence and employment. The Reserve Bank of Australia lifted rates 0.25 points at its March meeting to a fresh 12-year high of 7.25 percent.
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