Australian shares are set to start off the way they ended last week and follow the lead set in New York with prices expected to fall when trading resumes on Monday.
Futures trading on the Australian Securities Exchange (ASX) indicates the ASX 200 index will slip by 0.43% when the market opens at 10:00 am AEST (12:00 am GMT) with the June contract last priced 38 points below the prior end at 8,618 points.
This followed a lower close on Wall Street on Friday (Saturday AEST) when stocks pulled back sharply from artificial-intelligence (AI)-driven records as rising oil prices raised worries about inflation.
The three main price indexes dived more than 1% after Treasury bond yields rose in response to higher crude oil prices and concerns about long-term inflation.
The Dow Jones Industrial Average dropped 1.1%, the S&P 500 shed 1.2% and the Nasdaq Composite dived 1.5%.
"There’s a realisation that the market had gotten way ahead of itself," Slatestone Wealth chief market strategist Kenny Polcari was quoted as saying in a Reuters article.
"It wasn’t paying enough attention to what the bond market and economic data is telling it. It was caught up in this momentum AI trade."
A lower open will extend losses for ASX investors after the ASX 200 Index ended down 0.1% at 8,630.8 points on Friday as falling mining stocks offset gains in nine of the index’s 11 sectors.
Companies to watch include Brambles (ASX: BXB), which lowered its earnings guidance, EOS (ASX: EOS), which announced a capital raising, ALS (ASX: ALQ), New Hope (ASX: NHC) and Elders (ASX: ELD), which are reporting results, and Macquarie Group (ASX: MQG) and Alcoa, which are trading ex-dividend.
In fixed interest markets, the Australian Government bond yield steepened as two-year rates dipped by 0.21% to 4.782% and 10-year rates rose by 0.41% to 5.139% at the time of writing.
