Volatility was likely to continue for Australian shares in the coming days as the market ended another week below 5,000 points, dealers said on Friday. For the week ending August 22, the benchmark SP/ASX 200 index closed down 50.3 points, or 1.0 percent, at 4,931.4. The market's last weekly close above 5,000 points was on July 4.
Dealers said that while the stock market began the week strongly, tipping over 5,000, heightened concerns over credit losses coupled with Wall Street weakness weighed on the market.
Shares were volatile, with resources stocks up thanks to higher commodity prices but financials lower, said Shane Oliver, head of investment strategy and chief economist at AMP Capital Investors. "While the profit reporting season has been okay, it has certainly not been good enough to protect the market from bad global news," he said.
Oliver said shares were likely to fall in the months ahead, despite the potential for more upside into mid-September. "The next few months are likely to remain rough for shares," he said in a market note.
"More weakness in late September/October is anticipated as the global economic downturn feeds into more profit downgrades, particularly for cyclical sectors, and as bank asset write-downs continue."
In the week ahead, the 2007/08 financial year reporting season will wrap up with 75 companies reporting including Anglo-Australian mining giant Rio Tinto, leading energy producer Woodside Petroleum and shopping centre owner Westfield.
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