The sharemarket closed lower as two of the big four banks traded ex-dividend and weak employment figures dampened investor sentiment.
The benchmark S&P/ASX 200 Index shed 11.8 points to 5422, after the local market opened lower despite strong leads offshore.
"Australian equities are likely to post a positive return over the remainder of 2013 and maybe into early 2014 but after that there are plenty of risks," Colonial First State senior investment manager Peter Dymond said.
"We are concerned about the US Federal Reserve starting to reduce its stimulus before gross domestic production has risen sufficiently and markets reacting badly.
"Other known risks for the Australian equity market next year include a credit crisis and implosion of the shadow banking sector in China, sovereign debt issues in Europe and a global oversupply of iron ore. But if the US, Europe and China remain stable there is the potential for the Australian equity market to post returns up to 10 per cent in 2014."
Financial services was the worst-performing sector on Thursday, down 0.7 per cent as ANZ, NAB and Bank of Queensland all traded ex-dividend. NAB finished 0.7 per cent lower at $34.68, while ANZ shed 1.6 per cent to $32.38 and BOQ ended 0.8 per cent lower at $11.95.
Westpac fell 0.5 per cent to $34.23 before going ex-dividend on Friday. Commonwealth Bank rose 1.7 per cent to a record $79.32 and Macquarie was ahead 2.6 per cent at $54.60.
Perpetual portfolio manager Vince Pezzullo said the banks "are priced to perfection and there are better opportunities in other parts of the market". He is reviewing industrial stocks that have underperformed over the past 18 months. BHP gained 0.4 per cent to $38.24, Rio fell 0.2 per cent to $65.48 and Fortescue lost 2.4 per cent to $5.70, despite the spot price for iron ore edging higher.
The gold spot price dipped 0.1 per cent to $US1317.30 an ounce at the local close. Newcrest Mining, Australia's biggest goldminer, fell 0.6 per cent to $10.13. Junior goldminer St Barbara lost 15.7 per cent at 35¢ after Moody's downgraded its credit rating. Ausdrill was the worst-performing stock, plummeting 28.7 per cent to 98¢ after issuing a 2014 profit warning due to continued low demand from the mining industry for its drilling services.