Shares have suffered heavy falls to end the trading week, and some economists say a trending change in markets could mean the rout is not over yet.
Shares have suffered heavy falls to end the trading week in Australia amid ongoing concerns about inflation, interest rates and the potential impact of looming Donald Trump tariffs.Tens of billions of dollars have been wiped off the local share market as investors fret about the direction of inflation and interest rates.
"I suspect what we saw in the US overnight might be just a pause and the readjustment in the US will continue," he said. "And I think some of that speculation about a Santa rally might have contributed to the sell-off we're seeing now — that extended buying in the wake of the US election is now coming home to roost, and I think that talk of a Santa rally may have made some investors complacent, there always are risks in share markets."The ASX200 fell to its lowest level since September, following the US Federal Reserve's decision to revise down its expectations for interest rate cuts in 2025.
"One of the concerning things to an extent is the level of cash Australian institutions are holding at the moment," Wilson Asset Management founder Geoff Wilson told the ABC."And, on average, they tend to hold around 8 per cent." the large Australian super funds ."It means they're more exposed ," Mr Wilson said.
"You want to have a bit aside in cash that you can draw on or live on through volatile periods in the share market," Dr Oliver said.
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