The Australian share market is tipped to open higher in the wake of a strong performance on Wall Street, with mining stocks likely to offset the impact of weaker energy companies.
At 9:10 am (AEDT) the S&P/ASX 200 March share price index (SPI) contract was up 32 points or 0.38% at 8,327 points.
In New York the Dow Jones Industrial Average increased 1.2%, the S&P 500 added 0.9% and the Nasdaq Composite rose 0.6% points as investors welcomed the fact that President Donald Trump’s initial decisions and statements were less aggressive than expected.
Chief CommSec Economist Ryan Felsman said this was the best performance on Wall Street for more than a month.
He said Trump’s declaration of a national energy emergency to increase oil and gas production undermined crude oil prices and was likely to pressure Australian stocks like Santos and Beach Energy.
But the strength in the iron ore and gold prices would be supportive of producers of those commodities like Rio Tinto and BHP while falls in U.S.Treasury bonds would help interest-rate sensitive sectors like real estate, utilities and technology.
“Iron ore producers are likely to be up a bit today, supporting the market, but this will be partly offset by energy producers, so our market isn’t likely to increase as much (as Wall Street),” Felsman said.
On fixed interest markets, Australian Government bonds yields were higher with 10-year paper up 0.23% at 4.450% and two-year paper up 0.08% at 3.927%.