Shares snap winning streak

12/10/2011
SMH.com.au

Today the Australian share market has closed lower for the first time in a week as Australian investors turns its attention to the European debt crisis and the US economy. This is not good for the future of the stock market as these are the two largest economies in the world and if they are affected by a possible downturn or recession it may translate to a lot of worldwide panic across the world especially as they are just recovering from the GFC.

In the last week the Australian dollar was very close to parity again with the US dollar, showing instability overseas but also how Australia has been riding out the recent economic times. Shares (also shown by the analysis of the share market game) have also risen but analysts have said that the market was due for a fall especially after the unprecedented run of good form.
‘‘Throughout the day, I noticed that every time we saw a bit of weakness, we’d gravitate back to the 4200 level; that tells me that there is a lot of conviction in the rally which we’ve seen over the last week,’’ he said. ‘‘Certainly we’ve got the catalyst for a sustained rally to year end.’’

He is becoming optimistic about the share market being able to rally further still towards the year end but that will be very dependent on the US economy and how it will ride out the effects of the GFC and the European debt crisis, in which they are certainly not out of the woods yet.