Australian share prices are poised to extend their gains on Wednesday after United States stocks continued to climb overnight amid optimism about a resolution of the Middle East conflict and as investors assessed U.S. bank profits and inflation data.
An 0.37% lift in the ASX 200 index when trading resumes was indicated by futures trading on the Australian Securities Exchange (ASX) where the June share price index contract was priced 34 points over the prior settlement at 9,038 points.
The impetus came from Wall Street, where stocks continued to rise after U.S. President Donald Trump said talks to end the Iran war could resume in Pakistan over the next two days.
The Dow Jones Industrial Average added 0.7%, the S&P 500 leapt 1.2% to approach a new record close, and the Nasdaq Composite surged 2% on Tuesday (Wednesday AEST).
Equities markets are sensitive to news of the peace process because of the impact of oil prices on inflation expectations.
"We don't have a resolution yet but investors don't want to miss the rebound," NFJ Investment Group portfolio manager Burns McKinney was quoted in a Reuters article as saying.
The market was also cheered by news that U.S. producer prices increased less than expected in March and the strong start to the U.S. earnings reporting season.
"The market is kind of moving past this concept of peak uncertainty. There's been a lot of uncertainty in the market, whether that's coming from the Iran conflict, AI disruption fears, inflation concerns or Federal Reserve policy concerns," Saglimbene said.
"Markets are starting to kind of walk away from some of the worst-case scenarios for these events and because valuations have improved over the last couple of weeks and months, investors are buying the dip right now."
The Australian sharemarket had finished higher on Tuesday due to hopes about negotiations leading to a resolution of the United States-Iran conflict, with the ASX 200 Index rising 0.5% to 8,970.8 points.
In fixed interest markets, yields on Australian Government bonds eased with two-year rates falling 0.02% to 4.624%nd 10 year rates dipping 0.04% to 4.919% at the time of writing.
