Australian share prices are set to open higher on Thursday following a stronger night on Wall Street, where healthcare was the stand-out sector.
The S&P/ASX 200 should start about 0.5% above the previous close, according to futures trading on the Australian Securities Exchange (ASX), where the share price index December contract was quoted 44 points higher than the prior settlement at 8,921.
The direction was set in C, where the three major benchmarks closed higher, supported by the healthcare sector and despite weaker-than-expected private payrolls data and uncertainty around the first day of the U.S. federal government shutdown.
The Dow Jones Industrial Average rose 0.1%, the S&P 500 added 0.3% and the Nasdaq Composite gained 0.4%.
President Donald Trump said he expected drug companies to follow the lead of Pfizer, which agreed to lower prescription drug prices in the Medicaid program in exchange for tariff relief.
Janus Henderson Investors’ U.S. Head of Portfolio Construction and Strategy Lara Castleton said the Pfizer deal with Trump was the catalyst for a revival in the healthcare sector, which had underperformed the market this year.
"People have not necessarily been avoiding it, but they have not been as heavily allocated into healthcare as they have been in technology and all the AI hype," she said.
A shutdown of the U.S. government began on Tuesday after the Republican-led Senate failed to secure a temporary spending bill.
The stronger opening by Australian shares is good news for investors who saw the market fall on Wednesday as they braced for the first U.S. government shutdown since 2018.
In fixed interest markets, yields fell on Australian Government bonds with two-year rates down 0.57% to 3.508% and 10-year rates off by 0.07 to 4.322%.
Among the stocks to watch are ARB Corp (ASX: ARB), whose shares trade ex-dividend today.
