The Australian sharemarket is expected to open slightly lower on Friday despite stocks in the United States rising overnight as hopes increased of peace in the Middle East war.
The ASX 200 index should start about 0.08% under its previous close when the Australian Securities Exchange (ASX) reopens at 10:00 am AEST (12:00 pm GMT Thursday), based on ASX futures trading.
The June share price contract of the benchmark was quoted just eight points under the prior settlement at the time of writing.
All three major U.S. stock indexes gained ground on Thursday (Friday AEST) amid hopes that the ceasefire between the United States and Iran would hold.
The Dow Jones Industrial Average gained 0.6%, the S&P 500 added 0.6%, and the Nasdaq Composite put on 0.8% as market sentiment remained supported by optimism that the two-week ceasefire would hold after five weeks of fighting.
"There's an increasing recognition that this administration is more bark than bite, and willing to make grand statements about world destruction," Wealthspire Advisors senior vice president Oliver Pursche was quoted as saying in this Reuters article.
He said investors had to decide whether to ignore it or cash in and “sit it out the next two years”.
“It’s been an interesting week. You always like to see a pop when there’s de-escalation,” Burrell Stockbroking wealth adviser Adam Dight said.
The ASX 200 has risen 3.5% over the last five days, and although it is flat over six months, the 12-month rise is 19.5%.
“It clients want to do a bit of bottom-picking then let them but otherwise it’s business as usual, sitting on more cash than we have all year,” he said.
Cash levels were about 10% of portfolios compared with 3% usually.
Dight recommended buying stocks with overseas earnings like Amcor (ASX: AMC), Brambles (ASX: BXB), ALS (ASX: ALQ) and Ansell (ASX: ANN), some miners, banks at index weight, Coles (ASX: COL), Woolworths (ASX: WOW), Telstra (ASX: TLS) and Macquarie Group (ASX: MQG).
The ASX 200 rose 0.2% to 8,973.2 points on Thursday as the best rally in a year continued due to optimism over a potential diplomatic resolution in the Iran conflict.
In news today, GPT Group (ASX: GPT) has held its annual general meeting.
In fixed interest markets, yields on Australian Government bonds firmed with two-year rates rising 0.13% to 4.644% and 10 year rates gaining 0.39% to 4.945% at the time of writing.
