The Australian sharemarket is set to keep sliding after a mix night on Wall Street where two of the major stock indices continued to touch new highs.
Futures trading indicated the S&P/ASX 200 index would drop 0.4% on the opening with the September share price index contract trading 39 points below the prior settlement at 8,637 at the time of writing.
This followed a slightly lower close on Thursday amid profit taking and pending more details on a potential trade deal between the United States and the European Union (E.U.), with the market barometer losing 0.3% to 8,709.4.
In a webinar on Thursday, research house Morningstar highlighted attractive investment opportunities in the Australian healthcare and consumer sectors, with energy the most underrated sector and basic materials and consumer sectors also offering good value.
“It's hard to pick winners (among individual stocks), so we're trying to play sector themes,” Burrell Stockbroking wealth adviser Adam Dight said.
He said the market would be closely watching second-quarter (Q2) earnings from Newmont (ASX: NEM) because of investor demand for gold stocks.
The S&P 500 and the Nasdaq closed at record levels on Thursday (Friday AEST) as a strong Q2 result from Google parent Alphabet fuelled optimism about technology stocks riding the artificial intelligence boom, although the Tesla result disappointed investors.
The S&P 500 edged up 0.1% and the Nasdaq Composite added 0.2%, both to new highs, helped by a rise in Alphabet shares, but the Dow Jones Industrial Average dropped 0.7% after IBM results fell short of expectations.
The rising indices were also buoyed by the U.S.-Japan trade deal and positive indications that talks with the E.U. would culminate with a deal.
"Investors are feeling optimistic about trade negotiations, about the economy, the trend in inflation, as well as the better-than-expected Q2 earnings reports," CFRA Research Chief Investment Strategist Sam Stovall was quoted in a Reuters story as saying.
On the bond markets, yields rose across the curve with 10 year rates on Australian Government paper rising 0.05% to 4.365% and two year rates increasing 0.15% to 3.414%.
