UNCERTAINTY over Australia's political gridlock is tipped to weigh on the share market and hit the dollar today as investors grapple with the ramifications of a hung parliament.
And the political instability could deter foreign investors in the short term, with some already hitting the phones to check with their Australian representatives after the weekend's historic turn of events.
Access Economics economist Chris Richardson described a hung parliament as "the worst outcome" for business, and predicted that Australia would be "less attractive" for overseas investors and domestic companies alike.
Pengana Capital fund manager Tim Schroeders said he was "definitely thinking about" the possibility that offshore may be a safer place to invest given the current uncertainty in the local market.
AMP Capital Investments chief economist Shane Oliver said he expects the share market to dive from the bell today, tipping a fall of about 30 points on the back of a negative Wall Street lead.
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"Uncertainty is the last thing investors want at the moment given the increasing worries about a double dip in the United States and global recovery," Dr Oliver said.
He forecast a "fairly nervous" time ahead for markets and said this could persist even after a minority government emerged "because the mandate will be a fairly weak one".
One senior PR figure yesterday said he had already fielded calls from investors in China and Europe, worried about the impact of a hung parliament on Australia's AAA economic rating.
Commsec's Craig James said he believed the biggest reaction would be the effect on the Australian dollar, but resources stocks could "pop" fuelled by hopes the controversial resource profits tax may be scrapped.
One of the tax's most vocal opponents, Pilbara billionaire Andrew 'Twiggy' Forrest, last night called on both sides of politics "to hear the loud election outcome that no party has a mandate to introduce arbitrary, unfair and inconsistent economic intervention without full national consultation."
The Fortescue Metals Group boss said the outcome showed Australia had "rejected irresponsible economic management''.
Telstra investors may have a tougher time today confronting the uncertain future of the planned $43 billion National Broadband Network, which includes a $11 billion compensation cheque to the big telco for its fixed-line network.
"We await the outcome and will continue to work constructively with all political stakeholders,'' a Telstra spokeswoman said.
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