Australian shares to rise in 2011 if caution recedes: analysts

15:16, January 03, 2011      

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The Australian share market is set to rise in 2011 if caution subsides, local media quoted analysts as reporting on Monday.

Most analysts have an optimistic outlook on the Australian share market in 2011, with forecasts of a 17 percent rise, but some remain wary of the financial crisis that can't be foreseen, according to an Australian Associated Press (AAP) report.

Most analysts agree Australian shares are attractively valued, and domestic economic indicators point to good growth in equities in 2011.

But some experts believe that it is now offshore influences that are holding back the equity market, apart from the likelihood of further interest rate rises in 2011.

Some see slowing economic activity in China as a threat to Australian equities in 2011, sparked by recent tightening of fiscal policy.

"The rhetoric does suggest that fears over the bubble bursting should also be put to one side, at least until the new year," said analyst Colin Whitehead at Fat Prophets, an Australia-based investment company.

"We expect that inflation and growth data emanating from China will remain a key focus in the weeks and months ahead," Whitehead said.

Source: Xinhua
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