Australian shares are set to rise when the market opens on Thursday after a mixed night on Wall Street, where the Dow Jones Industrial Average hit another record.
The Australian Securities Exchange (ASX) should begin up about 0.1%, based on futures trading, which quoted the December contract of the S&P/ASX 200 index 11 points over its previous settlement at 8,883.
The Dow hit a new peak in New York on Wednesday (Thursday AEDT) as healthcare stocks were sought, but the Nasdaq Composite slipped in a continued rotation from technology to value stocks, and the S&P 500 was basically flat.
The Dow jumped 0.7%, the S&P 500 put on just 0.1% and the Nasdaq dropped 0.3%.
“We have seen somewhat of a rotation away from Nasdaq-heavy leadership toward other areas of the market doing pretty well, like healthcare and financials," Northwestern Mutual Chief Equity Portfolio Manager Matt Stucky was quoted as saying in a Reuters story.
A key focus on Wall Street was the possible end to the longest government shutdown in United States history as politicians prepared to vote to resume food assistance, pay federal workers and revive the air traffic control system.
U.S. Bank Wealth Management Senior Investment Director Bill Northey said ending the closure would be positive for sentiment and the economy, given the importance of the federal government and airline system.
Morgans Financial Private Client adviser Lachlan Walsh said that although the ASX was expected to open higher, trading over the last week showed gains could not be sustained.
“Given how the week has been tracking, it will probably finish down,” he said.
The Australian market had been underperforming the U.S. market, with warnings from the Big Four banks and Macquarie Group about competition weighing on sentiment over the last week amid concerns about their valuations.
“It’s five birds fighting over the one chip, really,” Walsh said.
The Australian market had closed 0.2% lower at 8,799.5 points on Wednesday, with six of the 11 industry sectors, including materials and energy, finishing up, but technology among those falling.
Companies to watch today include Orica (ASX: ORI) and Xero (ASX: XRO), which have released their full-year results, Next DC (ASX: NXT), which holds its annual general meeting, and Australia and New Zealand Banking Group (ASX: ANZ), which trades ex-dividend.
In fixed interest markets, yields in Australian Government bonds continued to rise with rates on two-year paper gaining 0.47% to 3.648% and 10-year rates adding 0.32% to 4.382%.
