An improving economic outlook bodes well for Australian shares in the week ahead, dealers said on Friday. For the week ending October 23, the benchmark S&P/ASX200 index rose 23 points, or 0.48 percent, to close at 4,859.4.
Shane Oliver, chief economist at AMP Capital Investors, said any pullback in shares was likely to be limited as the economic picture became increasingly brighter, "dragging stale bears back into the market".
"The combination of the improving economic and profit outlook at the same time that inflation and interest rates are low and so many investors are still underweight shares is very positive for equities going forward," he said. He said he expected the rising trend to remain in place. "Since their lows in March, Australian shares are up by 56 percent, but the typical cyclical bull market sees average gains of 132 percent spread over four years, suggesting that as the economic recovery continues there is still plenty of scope for further gains in share markets," Oliver said.
IG Markets research analyst Ben Potter said investors bought back into financial stocks on the Australian market Friday on the lead of Wall Street. He said "local investors appeared happy to increase exposure to the sector ahead of full-year earning results from ANZ, National Australia Bank and Westpac Banking Corporation due out next week."