Australian shares experienced another soft week amid concerns about the US economy with more volatility expected in the days ahead, dealers said Friday. For the week ending July 18, the benchmark S&P/ASX 200 fell 139.5 points, or 2.8 percent, to 4,840.4, adding to the 2.0 percent fall of the previous week.
"The volatility we have seen recently shows no signs of abating," economists from ANZ Economics and Markets Research said in a note. While a rebound in US equities provided the Australian market with some relief, the sharp fall in oil prices was hurting local resource stocks and any recovery was dependent on the financial sector and the price of oil, they said.
"Although we are unlikely to see a significant recovery in equity markets anytime soon, we could see consolidation around the 4,800 level," they said. Harley Salt, head of sales trading at IG Markets, said news that China's economic growth has slowed had dented the enthusiasm for resource stocks.
"The S&P/ASX 200 ended the week down over 100 points... following on from the fall of over 100 points the previous week. It is beginning to feel like a broken record," he said. "Rallies, when they happen, have proved to be very short-lived. These markets are still very weak."