The Australian sharemarket is poised to edge down when it opens on Thursday after a mixed night on Wall Street featuring record highs from two indices.
A 0.2% drop by the S&P/ASX 200 index was indicated by futures trading on the Australian Securities Exchange (ASX) as the September share price index contract was trading 20 points under the previous settlement at 8,805.
Shares in New York sent mixed signals as the S&P 500 and Nasdaq Composite Index closed at new highs on Wednesday (Thursday AEST), but the Dow Jones Industrial Average finished lower.
The S&P 500 added 0.3% and the Nasdaq gained just 0.03% as the Oracle share priced soared and lower-than-expected inflation data supported interest rate cut expectations.
But a fall in Apple shares after a disappointing iPhone announcement pressured the Dow.
U.S. Bank Wealth Management Senior Investment Director Bill Northey said market fundamentals remained strong after an 11% rise in the S&P 500 and a 13% increase in the Nasdaq this year.
"But we also have to acknowledge that valuations are extended at this point and serve as some natural tension to a continued upward trajectory," Northey was quoted in a Reuters story as saying.
Morgans Financial private client adviser Lachlan Walsh said that although the ASX finished higher after listed companies completed lodging their results in August, it was also one of the more brutal reporting seasons.
He said seven of the 17 sell-offs of 10% or more of ASX 50 companies on reporting day in the last 10 years were during August.
“We are still feeling the effects of those. I know the market has tranched higher but a bit of value has come up in some of those names. It’s just such a reactionary market at the moment,” Walsh said.
Morgans saw value in ‘gold and guns”, referring to miners of the precious metal and companies exposed to rising defence spending.
“There’s some good buying out there,” Walsh said.
The Australian sharemarket finished higher on Wednesday with the S&P/ASX 200 Index gaining 0.3% to 8,830.4.
In fixed interest markets, the Australian Government bond yield steepened as two-year rates dropped by down by 0.03% to 3.373% and 10-year rates flat added 0.28% to 4.259%.
