Australian shares are poised for a strong open on Thursday, following a rally on Wall Street as investors responded to increasing optimism over a potential peace agreement between the United States and Iran.
Futures for the S&P/ASX 200 are pointing up 95 points, or 1.1%, to 8,892, signalling a positive start for the local market.
Analysts at ANZ noted in a client update: "Markets were driven by optimism about an agreement being reached in the coming days to end the Middle East conflict, although the degree of optimism oscillated through the day in response to various statements from both sides.
"President Trump said it was too early to prepare for a face-to-face meeting with Iran, whilst Iran said the proposal was an American initiative with some exaggeration.
"The situation remains highly fluid with intraday volatility likely to remain high until greater substance emerges."
The upbeat tone follows a robust session in New York overnight, where both the S&P 500 and the Nasdaq Composite closed at fresh record highs. The Dow Jones Industrial Average also posted solid gains, rising 1.2%, while the S&P 500 advanced 1.5% and the Nasdaq Composite surged 2%.
Technology stocks led the gains in the U.S., with Advanced Micro Devices surging 18.6% to a record high after strong data centre demand boosted its sales outlook.
The positive global lead comes after the Australian sharemarket closed higher in the previous session, with the S&P/ASX 200 rising 1.3% to 8,793.6. Five of the index’s 11 sectors ended the day in positive territory.
In Thursday’s session, investor attention will turn to corporate earnings, with results expected from Orica and Light & Wonder.
On the economic front, Australia’s March trade balance data is scheduled for release at 11.30 am AEST (1:30 am GMT).
Market participants will also be watching for the release of minutes from the Bank of Japan’s latest policy meeting, which could offer clues on the future direction of monetary policy.
In fixed income markets, Australian government bond yields edged lower, with both the 10-year and 2-year rates declining by 0.1% to 4.899% and 4.605%, respectively.
