Australian share prices are expected to see volatile trade next week as fears over US interest rate rises and inflation persist, but the overall outlook remained positive, dealers said Friday.
They said volatility in commodity prices would also impact on trade but bargain-hunters were entering the market after the recent heavy sell-off.
"I think we are going to see a few volatile days but generally consolidation," CMC Markets trader Josh Whiting said.
For the week ending May 19, the benchmark S and P/ASX 200 index slumped 228.6 points, or 4.29 percent, to close at 5,100.9.
Commsec chief equities economist Craig James also said the outlook was positive despite caution among investors.
"It's clear investors are on edge because the sharemarkets have been shooting the lights out, and now investors are having to confront some bad news," James said.
"With the sort of gains that were being recorded, it meant at some point investors had to pause for breath." CMC Markets senior dealer James Foulsham said the volatility would continue for another month or two as the market attempted to find direction.
"The fundamentals are pretty much still there. There is still strong demand coming out of China and the US."