The Australian share market pulled back once again today only a little with the S&P/ASX 200 index easing by 0.40pct. The market finished around 0.5pct lower this week.

The Japanese markets are the worst performing in the Asian region with the Nikkei 225 index currently down 2.77pct or 267.81pts to 9417.72 at the close. The Japanese market has eased by around 1.75pct over the week. Note, Japan is heading into a 3 day weekend to celebrate Marine Day. Marine Day is intended as a day of gratitude for the ocean.

Our energy sector finished in the red and extended losses throughout the second half of trade with Woodside Petroleum (WPL) down 0.72pct or 31cents to $42.54 at the close ahead of its 2nd quarter production figures which are expected to be released next week.

Australian banks also finished the day off mostly in the red with Commonwealth Bank of Australia (CBA) the only of the big 4 to gain modestly by 0.06pct or 3cents to $51.36. National Australia Bank (NAB) said today that it's still in talks with AXA Asia Pacific (AXA) in addition to its French parent company AXA SA to extend the negotiating period which expired at midnight last night. For those interested, SA stands for 'Société Anonyme' in Civil law nations like France and is used to designate corporations in those countries. Concerns were previously raised by the Australian Competition and Consumer Commission (ACCC) over its more than A$13 billion bid for the company.

The miners finished mostly lower with the S&P/ASX 200 Materials index falling 0.59pct or 68.9pts to 11574.8 with BHP Billiton (BHP) managing to gain slightly by 0.05pct or 2cents to $38.15. Copper and gold miner, Oz Minerals (OZL) gained 1.35pct or 1.5cents to $1.13 after releasing its production update and announcing it has increased its annual gold production and is in line with its copper production expectations.

Next week will be a quiet one economically speaking with only a few bits of data out in Australia. Imports for June will be released on Monday, a speech by the Reserve Bank Governor entitled "Some Long-Run Effects of the Financial Crisis", the CBA Business Spending Indicator for June, and the Reserve Bank Board minutes out on Tuesday and finally import and export prices out on Friday. Commsec's Chief Economist, Craig James said today that "One issue that is starting to receive more attention is the correlation between individual stocks, sectors and sharemarkets. The Wall Street Journal ran an article entitled "The Herd Instinct Takes Over" citing research showing that stocks are trading in lock-step more than at any time since the 1987 sharemarket crash. The analysis indicates that investors are spending less time picking individual stocks, instead using broad-based techniques such as use of exchange-traded funds or program-trading techniques."

Mr James went on to say that "It's amazing how quickly views can change. From mid May up until July 8, financial market pricing suggested that an interest rate cut was more likely than a rate hike. But stabilisation on equities markets, combined with stronger domestic employment and a rebound in consumer confidence and all of a sudden rate hikes are back on the menu. Current pricing suggests a 20 per cent chance of a rate hike at the August meeting. Clearly inflation data on July 28 will be pivotal to views. But it is important to note that financial types aren't getting carried away. The six-month overnight indexed swap rate stands at 4.60 per cent, just above the current 4.50 per cent cash rate".

Volume traded on the market was extremely light today with only 1.74 billion shares traded, worth $3.27 billion. 472 shares were up, 501 finished weaker and 347 ended unchanged.

At 4.30pm AEST on the Sydney Futures Exchange, the Share Price Index futures contract (SPI) is down by 0.61pct or 27pts to 4406.

Dow Jones futures are pointing to a weaker start when the market opens at 11.30pm (AEST) tonight.

Tonight, Bank of America, Citigroup, General Electric and Mattel will be posting their 2nd quarter results in the US. Next week, several hundred companies release their numbers.

Provided by www.comsec.com.au