The Australian stock market will likely take its lead from Wall Street next week but overall the sentiment remains negative, dealers said Friday. For the week ending November 14, the benchmark S&P/ASX200 lost 301.7 points, or 7.4 percent, to 3,749.6 points. The market hit a four-year low on Thursday before notching up a 1.4 percent gain on Friday.
Dominic Vaughan, a senior dealer at CMC Markets in Sydney, said trading volumes had been slim for weeks while "the real money is sitting on the sidelines" and he expected this trend to continue.
He said any movement on the Australian bourse next week would likely take its lead from Wall Street but that overall the sentiment remained negative.
"The methodology here at the moment is that it (the market) has its moments and then gets hit over the head," he told AFP. "There's enough bad news out at the moment to limit any upside. "I think for our market, and I think the global market, we need a sustained rally. At the moment it's more of a relief rally than a change of sentiment."
Vaughan said the US would set the tone for the week ahead. "The world is watching whether the US can gain any traction or the US housing market can find some support, or they can dig themselves out of the mire they've got themselves in," he said.
"If they can do it then the rest of the world will follow suit basically." Vaughan said he did not expect any major impact in Australia following this weekend's G20 meeting in Washington.
"The market is half hoping they may get some sort of co-ordinated effort but they will wait and see what actually comes out of the meeting," he said.