The Australian stock market is in a vulnerable position and faces downside risks in the coming week, dealers said Friday. For the week ending February 27, the benchmark S&P/ASX200 lost 57.9 points, or 1.7 percent, to close at 3,344.5.
With the domestic corporate reporting season done, investors would be looking offshore for reassurance, particularly regarding US banks, said CMC Markets analyst Dominic Vaughan. "The market's trying to hold on at the moment, it's still vulnerable to another leg to the downside at this stage," Vaughan told AFP.
"Results haven't been too bad, but a lot of these companies have indicated tough conditions ahead, and it's going to be a difficult next couple of weeks. "Many eyes are still going to be on the US and their financial sector." IG Markets analyst Ben Potter said investors were acting with caution.
"You just don't know what's around the corner. The market is starved of all confidence right now, with so many managers (feeling) once bitten, twice shy," said Potter. "They just can't bring themselves to invest their cash, or what's left of it." The recent profit reporting season had been the worst in six years, said AMP Capital economist Shane Oliver.
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