Calmer start tipped for local market

The sharemarket is tipped to open in a calmer mood after two days of volatile trading wiped off nearly $60 billion in value.

The ASX ended the week at a five-week low after hitting 5-year highs a little over a week ago.

US markets closed flat on Friday while European stocks were down. In futures trading in Australia, the ASX 24 is pointing to a fairly flat open on Monday of six points lower.

CommSec chief economist Craig James described the events of late last week as good old-fashioned and healthy profit-taking after a strong run in bank and industrial stocks.

"I think a lot of investors, particularly fund managers with thoughts turning to June 30, are thinking now is the time to take some profits if there is a flatter time or period of weakness ahead," he said.

He believes much of the economic news that drew negative reactions on markets last week represents positive news longer term.

That includes the US Federal Reserve pondering pulling back on stimulus for the economy, indicating a recovery, the Australian dollar falling and even the Chinese slowdown, because authorities can stimulate it.

Fund managers might take cash out of the market short term to reassess investment strategies, following rises in sharemarkets around the world of late, Mr James said, but it was not a big concern.