Australian stocks snapped a three-day winning streak in spectacular fashion on Friday, giving up early gains of more than 2 per cent to close deep in the red.
The benchmark S&P/ASX 200 tumbled 270.9 points, or 5.3 per cent, to 4842.4, erasing much of the rebound in the previous three sessions. Despite the late plunge, the index still managed to finish the week with a 0.5 per cent gain.
Chris Weston, head of research at Pepperstone, said he was not surprised by the late move, suggesting the rally from the multi-year lows hit on Monday lacked conviction. “I’m not convinced by the rally, not at all,” Mr Weston said. “Volumes are rubbish. There’s no conviction – I just feel people are absolutely knackered.”
Given the speed of the rebound, coming despite a torrent of bad news on the state of the local and global economy, Mr Weston believes there’s a lot of scepticism among investors.