An easing of trade tensions which boosted United stocks overnight is likely to help the Australian Securities Exchange (ASX) recoup some of its losses by rebounding when trading begins on Tuesday.
Share prices are expected to open about 0.3% higher on average when the ASX opens at 10 am AEDT (11 pm GMT Monday), with futures trading putting the S&P/ASX 200 December share price 27 points above the previous settlement at 8,927.
The tone was set on Wall Street, where the major price barometers ended sharply higher on Monday (Tuesday AEDT) after President Donald Trump eased concerns among investors that he would escalate a trade war with China.
“Don’t worry about China, it will all be fine! Highly respected President Xi just had a bad moment. He doesn’t want Depression for his country, and neither do I,” Trump wrote on his Truth Social site.
“The U.S.A. wants to help China, not hurt it.”
The Dow Jones Industrial Average gained 1.3%, the S&P 500 rose 1.6% and the Nasdaq Composite jumped 2.2% as Broadcom and other computer chipmakers made ground.
Broadcom rose almost 10% after announcing a deal with OpenAI to produce the startup's first in-house artificial intelligence (AI) processors.
"AI continues to be the momentum driver, and it's not surprising investors have purchased the dip," CFRA Research Chief Investment Strategist Sam Stovall was quoted as saying in a Reuters story.
But he said investors should remain cautious while the China trade dispute was unresolved.
The Australian market had dropped 75.5 points or 0.8% to 8,882.8 on Monday in the face of renewed trade tensions.
Today the minutes of the Reserve Bank's (RBA) September monetary policy Board meeting will be issued, the NAB business survey will be released, and Rio Tinto (ASX: RIO) will issue its quarterly results.
In fixed interest markets, the direction of Australian Government bond yields diverged, with two-year rates edging 0.09% higher to 3.476% and 10-year rates falling 0.44% to 4.287%.
