Just when the outlook for the Australian sharemarket could not look bleaker as the global trade war pushed it into a formal ‘correction’, investors can be reassured it may not be in the very short term.
Futures market trading was foreshadowing an increase in the benchmark S&P/ASX 200 index when trading resumes on Thursday at 10:00 am AEDT (11:00 pm GMT Wednesday), boosted by a patchy but improved performance on Wall Street.
At 8:30 am AEDT (9:30 pm GMT) the S&P/ASX 200 March share price index contract was trading 18 points (0.23%) higher than the previous settlement at 7,799 points.
This would mark a turnaround for investors on the Australian Securities Exchange (ASX) given it dropped 1.3% on Wednesday to 7,786, the lowest level in seven months low on Wednesday, which pushed losses over the last five days to more than 4%.
The catalyst was the latest development in the global trade war initiated by new United States President Donald Trump when he confirmed Australia would not be exempt from steel and aluminium tariffs.
Canada and the European Union (EU) also responded to US tariffs on imported steel and aluminium products with their own duties on U.S. goods.
Australian shares that may defy the more positive trend are those going ex-dividend such as Bapcor Ltd (ASX: BAP), Inghams Group Ltd (ASX: ING), Perpetual Ltd (ASX: PPT) and Yancoal Australia Ltd (ASX: YAL).
Turning to fixed interest securities, yields fell for Australian Treasury bonds with 10-year rates down 0.18% to 4.461% and two year rates off by 0.16% to 3.804%.
