The Australian sharemarket opened higher on Monday, with end-of-financial-year (EOFY) portfolio positioning likely to drive trading, following a weaker finish on Wall Street on Friday.
By 10:25 am AEST (12:25 am GMT), the ASX 200 was trading 0.5% higher.
This puts the Australian market in a position to post a second successive session of gains despite the fact that the three major indexes fell in New York on Friday.
Investors in the United States remain concerned about the high valuation of technology companies, given that questions remain over the likely returns from the huge capital investment (capex) in artificial intelligence (AI) infrastructure.
The Dow Jones Industrial Average and S&P 500 dipped 0.1% apiece, and the Nasdaq Composite dropped 0.2% on Friday (Saturday AEST) as the market also weighed continuing Middle East tensions and the prospect of higher inflation driving up interest rates.
"It's too early to conclude that there's a major correction brewing in tech, but what I would say is that the questions around profitability and the capex story are certainly not going away," AlphaCore Wealth Advisory Chief Investment Strategist David Stubbs was quoted saying in a Reuters article.
EOFY positioning could influence trading in the ASX 200 and potentially lift volumes today, although it was unclear how portfolio adjustments would impact the direction once trading begins.
‘Window dressing’ can include buying stocks that have performed well because of their association with their success and selling poor performers to avoid reputation damage and crystallise capital losses for tax purposes.
The Australian market had finished a little stronger on Friday with the ASX 200 Index adding 0.18%.
In bond markets, yields rose on Australian Government bonds with two-year rates up by 0.36% to 4.471% and 10-year rates 0.42% higher at 4.758% at the time of writing.
