Australian shares are expected to fall as company earnings reports confirm an economic slowdown is underway, dealers said on Friday. For the week ending August 1, the benchmark S&P/ASX 200 was down 66.5 points, or 1.36 percent, to 4,904, wiping out most of the 2.6 percent gained the previous week.
AMP Capital Investors chief economist Shane Oliver said earnings statements released for company reporting season were likely to add to market jitters created by the global credit crunch. "The focus over the next few weeks of the reporting season is likely to be on the outlook statements released by companies and these are likely to be disappointing," he said.
While not discounting the possibility of a short-term bounce, Oliver said the Australian share market was in for a rough ride. "It is too early to say that the bottom in shares has been seen," he said.
"The still-high oil price, slowing growth virtually everywhere, profit downgrades, inflation worries and the continuing credit crunch are all big short-term headwinds for shares and are likely to ensure a rough ride with possible further falls out to the normally weak September/October period." Oliver said markets would be closely watching the Reserve bank of Australia's monthly monetary policy meeting, which is expected to leave interest rates at 7.25 percent. Data for house prices, job advertisements, housing finance and employment is also scheduled for release.
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