Australian shares are expected to open little changed on Tuesday, barely reacting to a technology sector rally which boosted stocks in New York overnight.
Australian Securities Exchange (ASX) futures trading points to the ASX 200 index gaining just 0.03% when trading resumes at 10:00 am AEST (12:00 am GMT), with the September contract priced three points over the prior settlement at 8,813 points.
If this plays out as expected, it will not be sufficient to recoup the losses suffered on Monday when the Australian market benchmark ended lower.
The market appears set to ignore the positive lead-in on Wall Street where investors returned to artificial intelligence (AI)-related stocks and the three major indexes closed higher, including the Dow Jones Industrial Average which set a record.
The Dow added just 0.3% but touched a record high, the S&P 500 put on 0.7%, and the Nasdaq Composite jumped 1.1% on Monday (Tuesday AEST).
Chip maker Broadcom jumped 3.7% after it agreed with Apple to extend to 2031 a deal to develop and supply a range of custom chips.
"This is a market that's leaving a lot of people out. If you're not in certain tech names, if you're not in semiconductors, then you're basically missing the entire rally," Longbow Asset Management chief executive officer Jake Dollarhide was quoted as saying in this Reuters article.
"I think it's a very tenuous rally. There is a risk, particularly if the Fed continues to see higher interest rates for longer."
Investors are also positioning for the start of the second-quarter earnings season later this week, with S&P 500 companies tipped to report aggregate earnings growth of 24% from a year earlier, according to Reuters.
Stocks on the ASX to watch include South32 (ASX: S32) after media reports the United States is set to announce approval of its US$3.3 billion (A$4.7 billion) Hermosa critical minerals project in Arizona.
Australian shares closed down a little on Monday with the ASX 200 Index ending 13.4 points or 0.2% lower at 8,831 points as five of the market's 11 sectors finished in the red.
In fixed interest markets, Australian Government bond yields were down, with two year rates off by 0.56% to 4.450% and 10-year rates 0.10% weaker at 4.798% at the time of writing.
