The continued rebound in share prices in the United States has set a positive undertone for the Australian market with the main index set to rise by about 1% when it opens on Friday.
At 8:40 am AEST (10:40 pm GMT Thursday) the S&P/ASX 200 June share price index contract was 80 points (0.96%) above the previous settlement at 8,411, putting the marker in a position to finish higher for a seventh consecutive trading day.
The S&P 500 index was a highlight as Wall Street stocks closed mixed on Thursday (Friday AEST), having more than regained losses from the downturn caused by U.S. President Donald Trump's global trade war.
The S&P rose 0.4%, the Dow Jones Industrial Average gained 0.7% but the Nasdaq Composite eased back by 0.2% as Cisco Systems benefited from a positive forecast and UnitedHealth dived on news of a criminal investigation.
Strength in banking and technology stocks offset weakness in the mining and energy sectors to leave the Australian market higher on Thursday with the S&P/ASX 200 climbing 0.2%.
Burrell Stockbroking wealth adviser Adam Dight said the drop below 18 on the CBOE Volatility Index (VIX), which measures the expected volatility in the S&P 500 index over the next 30 days was a good sign for the S&P and indicated investors were less pessimistic about the impact of U.S. tariffs than previously.
He said other positive signals from the U.S. were strong corporate earnings and share price movements that had triggered a Zweig Breadth Thrust signal, a rare but reliable indicator of upward market movements.
“I think it's got a (high) success rate of predicting an upward market in the next nine months, so it's got some credibility,” Dight said.
“If we look at the earnings, most of the S&P 500 companies that have reported so far have beaten the market consensus.”
Companies to watch on the ASX today include Appen and Gold Road Resources, both of which hold annual meetings, and Dicker Data, which trade ex-dividend.
On fixed interest markets, Australian Government bond yields dropped with 10-year rates slipping 0.29% to 4.462% and two-year rates easing 0.23% to 3.547%.
