The Australian sharemarket is expected to fall when trading resumes at the start of a new week as investors lock in profits generated by a stronger-than-expected profit reporting season and await a key interest-rate setting meeting in the United States.
Futures trading on the Australian Securities Exchange (ASX) put the likely drop at 0.6% when the bourse opens at 10:00 am AEST (12:00 am GMT) as companies continue to report their financial performance for the last six to 12 months.
At the time of writing, the S&P/ASX 200 September share price index (SPI) contract was trading 53 points under the prior settlement at 8,843 points, virtually eliminating the chances that record highs would be extended from Friday.
This followed a mixed night on Wall Street on Friday (Saturday AEST) as two of the major price indicators ended lower as economic numbers failed to clarify market expectations of the next Federal Reserve Board monetary policy move.
Although the Dow Jones Industrial Average rose 0.1%, the S&P 500 fell 0.3% and the Nasdaq Composite dropped 0.4%.
The economic and market eyes of the world will be focused on Jackson Hole, Wyoming, where Federal Reserve policymakers gather for their annual policy symposium, as investors look for clues on the direction of interest rates.
“We may have a lot at stake; this is a potentially significant event this year," IBKR Market Strategist Steven Sosnick was quoted in a Reuters story as saying.
The Australian market ended on a record high, for the fifth successive session on Friday, with the ASX 200 adding 0.7% to 8,938.6.
Investors have raised doubts about whether company earnings just the valuations of some ASX stocks, according to the Australian Financial Review (AFR) newspaper.
“While the profit upgrades to justify current valuations are missing, there were no meaningful downgrades either,” MST Marquee Senior Analyst Hasan Tevfik was quoted in an AFR article as saying.
The ASX reporting season continues with results scheduled today from A2 Milk (ASX: A2M), Ampol (ASX: ALD), Aurizon (ASX: AZJ), BlueScope Steel (ASX: BSL), GPT Group (ASX: GPT), Lendlease (ASX: LLC), and National Australia Bank (ASX: NAB) and later this week from BHP (ASX: BHP), Woodside Energy (ASX: WDS), Santos (ASX: STO) and Transurban (ASX: TCL).
In fixed interest markets, the Australian Government bond yield curve lifted with rates on 10-year paper rising 0.16% to 4.279% and two-year rates adding 0.33% to 3.335.
