A sharp rebound by United States technology stocks has set the Australian Securities Exchange (ASX) up for a strong opening on Monday as the reporting season gets underway.
The ASX 200 index is expected to start 1.2% above its prior close when trading resumes at 10:00 am AEDT (11:00 pm GMT Sunday).
This is based on futures trading on the ASX, where the March share price index contract was quoted 102 points above previous settlement at 8,759 points.
The catalyst was on Wall Street, where the three main indexes jumped more than 2% with the Dow Jones Industrial Average passing the historic 50,000 point mark on Friday (Saturday AEDT).
The Dow surged 2.5%, the S&P 500 climbed 2%, and the Nasdaq Composite put on 2.2%.
Computer chip makers rallied on hopes they would be boosted by increased spending on artificial intelligence (AI) data centres.
"This trade has been volatile, and there have been selloffs at times, but I think there's enough evidence that there's real demand for AI products, real promise with what they can do, and a necessity of a lot of spending to get there," Baird Investment Strategy Analyst Ross Mayfield was quoted in a Reuters story as saying.
"So when there's this kind of a selloff, I think there's a floor where there's going to be a certain set of investors that steps in and starts buying these names."
A higher ASX opening will offset some of the losses from Friday when the Australian sharemarket dived with the ASX 200 falling 180.4 points or 2% to 8,708.8 points, bringing the losses across the week to 1.8%.
Among the companies reporting today, as the ASX reporting season moves into full swing, are Argo Investments (ASX: ARG) and CAR Group Ltd (ASX: CAR).
In fixed interest markets, the Australian Government bond yield curve steepened as two-year rates fell 0.07% to 4.266% and 10 year rates rose 0.16% to 4.861%.
