The Australian stock market is likely to continue to fall with grim news mounting and no reprieve in sight, dealers said on Friday. For the week ending March 6 the benchmark S&P/ASX 200 lost 199 points, or six percent, to close at 3,145.5. Critical US jobs numbers due out later on Friday were likely to spark a significant sell-off, said CMC Markets analyst Dominic Vaughan.
"Theres definitely still momentum to the downside, with another big down night ahead in the US," Vaughan told AFP.
"That data could move the market significantly one way or another and people are expecting negative results." Investors were taking a "wait and see approach" ahead of the US data, and even if it proved better than expected, Vaughan said the general sentiment was one of negativity.
"There doesnt appear to be any sort of positive news on the horizon, the markets just negative. In the next week I think theres going to be a generally negative sentiment," he said.
IG Markets analyst Chris Weston said the market was predicting 650,000 job losses in the nonfarm payrolls report. "Depending on if this holds true or not, we could see another torrid session in both equity and foreign exchange markets," he said. Australian shares had now fallen by 55 percent from their November 2007 high, and had this week touched a new bear market low, said Shane Oliver, chief economist with AMP Capital. Looking ahead, Oliver said the short-term outlook for shares was "very messy". "More bad economic news is likely, and from a technical perspective the fall below the 740 level for the US S&P 500 index has opened up the possibility of a further fall to around 640 to 670," said Oliver.
"This would translate to just below 3,000 for the Australian share market. Against this, investor sentiment has fallen to extreme low levels."
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