SYDNEY (XFN-ASIA) - Share prices are expected to open lower, continuing a rout that saw the market lose more than 4 pct of its value last week with investors likely to remain nervous following further losses in New York on Friday, dealers said.
They said the resources sector is likely to lead the retreat following declines in prices of oil, gold and base metals.
With the December earnings reporting session now finished, dealers said investors are likely to refocus on merger and acquisition activity which still holds the potential to deliver attractive returns.
Today general insurer Promina Ltd's shareholders are expected to vote in favor of a 7.9 bln aud merger with banking and insurance group Suncorp-Metway Corp Ltd at an extraordinary general meeting.
The S&P/ASX 200 March futures contract ended its last session down 47.0 points at 5,728.0, suggesting a selloff at the start of trading.
On Friday, the S&P/ASX 200 closed down 24.2 points or 0.42 pct at 5,786.0. Over the trading week the key index dropped 250.1 points or 4.14 pct.
The broader All Ordinaries index lost 23.1 points to close at 5,775.2.
In New York shares ended sharply lower on Friday, extending selling that last Tuesday saw the biggest one day slide since the September 2001 terrorist attacks. A selloff on the Shanghai Stock Exchange sparked a chain reaction across global markets.
The Dow Jones Industrial Average logged its worst weekly performance in more than four years last week. The Dow fell 120.24 points or 0.98 pct to 12,114.10 on Friday, marking the seventh fall out of the last eight sessions. For the week the benchmark index fell 3.3 pct.
News Corp ended down 0.18 pct while National Australia Bank's American Depositary Receipts lost 0.27 pct.
In London share prices ended flat on Friday with merger and acquisition-inspired hopes in utilities helping to calm frayed investor nerves after a week of heavy selling in global equities. The FTSE ended up just 0.2 point at 6,166.2.
BHP Billiton fell 0.40 pct and Rio Tinto lost 0.22 pct.
The price of gold lost more than 2 pct on Friday as funds took money out of the precious metal complex to cover losses in equity markets. Program selling was relentless. COMEX gold for April delivery closed down 21 usd at 644 usd an ounce.
Base metal prices also ended lower, hit by fund withdrawals as investors wound down more speculative positions.
Traders said metal markets appear to be suffering from jitters that have hit world financial markets generally though nickel hit record highs during the week on continuing strong demand for stainless steel in China.
Oil prices settled lower on Friday as traders watched share markets decline even further, renewing concerns that global economic growth may stall.
The tenuous share market saga overshadowed tightening US gasoline supplies that helped push oil's Thursday settlement price to a more than two month high.
Light, sweet crude for April delivery fell 0.36 usd to settle at 61.64 usd a barrel on the New York Mercantile Exchange.
(1 usd = 1.28 aud)
bruce.hextall@xfn.com
blh/mas