Australian shares are likely to begin trading little changed on Friday despite a strong performance by stocks in the United States overnight.
The March futures contract of the benchmark ASX 200 index was quoted just four points below the previous settlement at 8,806 points in Australian Securities Exchange (ASX) trading at the time of writing.
This came after the three major indexes on Wall Street ended higher on Thursday (Friday AEDT) following U.S. President Donald Trump's decision to rescind tariff threats on eight European nations and following the release of positive economic data.
The Dow Jones Industrial Average added 0.6%, the S&P 500 put on 0.6%, and the Nasdaq Composite rose 0.9%.
Wall Street bounced back for a second day after a sharp sell-off on Tuesday prompted by Trump's tariff threats related to his quest for the U.S. to take control of Greenland.
"It's very weird to wake up every day as a money manager and you do not know whether it is Christmas morning or Friday the 13th," Investment Partners Asset Management CEO Gregg Abella was quoted saying in a Reuters story.
Abella said geopolitical issues were creating an extra focus on managing client portfolios through volatility, and emphasising the importance of diversification away from certain names, sectors and asset classes.
The ASX had finished in the black but off its highs on Thursday, with the S&P/ASX 200 index rising 0.75% to 8,848.7 points in the wake of higher-than-forecast jobs data, which increased expectations the Reserve Bank of Australia could lift interest rates next month.
Burrell Stockbroking wealth adviser Adam Dight said the ASX had been resilient, with investors who were underweight Australian equities benchmarks buying on price dips.
“They haven’t got the luxury of saying ‘we’ll wait for a real pullback’. It’s just attracting money,” he said.
He said resource stocks were “on fire” with threats of United States tariffs disrupting trading patterns, squeezing supplies of commodities and precious metals and driving up prices.
“Forget the fundamentals. This is not bottom-up stock picking any more,” Dight said.
In economic data, employee earnings and hours will be published by the Australian Bureau of Statistics.
In fixed interest markets, Australian Government bond yields rose strongly, with two-year rates adding 3.06% to 4.177% and 10 year rates gaining 1.90% at 4.832%.
