The uncertainty surrounding the containment of the coronavirus and how the US markets will again react will have Australian investors "twitchy" when the stock market reopens on Monday.
AMP Capital's chief economist Shane Oliver forecast a dip on the ASX200 index of around one per cent following a slight fall in the futures over the weekend.
He said after the Australian market fell 9.8 per cent last week, including 3.3 per cent on Friday, the Dow Jones rallied to post an acceptable loss.
The plunge wiped about $210 billion off the value of the ASX200.
Wall Street did fall heavily, initially, because of ongoing cornonavirus fears but then rallied, Dr Oliver told AAP.
"At the close, the Dow Jones ended up being 1.4 per cent which is an acceptable fall.," Dr Oliver said.
"Wall Street basically cut a loss of four per cent or more back to around 1 per cent ... and in fact the NASAQ ended up flat for the day.
"The futures market, which is the best guide to our market tomorrow, only fell 40 points which is only 0.6 per cent which is a normal sort of range."
Dr Oliver said because the Australian market had fallen so heavily last week, it was less likely to suffer another dramatic hit.
"The fact the market has already fallen so far may suggest we are getting to the bottom and we'll see stabilisation," he said.
"Our market will be really twitchy tomorrow and it will see how Wall Street opens on Monday night.
"Given the continued flow of bad news about the Chinese economy and coronoavirus cases I think the risk is we will see a fall but not to the extent that we saw on Friday but I would not be surprised if we were down one per cent or so."
Dr Oliver and CommSec chief economist Craig James both said there was a growing chance the Reserve Bank would lower interest rates when it meets on Tuesday.
Mr James said it "could not be ruled out completely" while Dr Oliver said there "was a good chance" interest rates would be cut by 25 basis points.