Continuing strength in United States stocks driven partly by optimism about trade negotiations is expected to provide the boost needed for the Australian sharemarket to extend its gains with a higher opening on Thursday.
A stronger close on Wall Street sets the scene for the Australian Stock Exchange’s (ASX) main price barometer to edge up by about 0.2% when trading resumes at 10 am AEST (12 pm GMT on Wednesday).
At the time of writing the S&P/ASX 200 index September share price index contract was trading 23 points higher than the prior settlement at 8,721.
"It’s tough to buy stuff at these levels in any sector at the moment. It’s a wait and see game going into reporting seasons,” Morgans Financial private client adviser Lachlan Walsh said.
“It feels expensive but it just doesn’t look like there’s anything out there that’s slowing down.”
U.S. stocks strengthened on Wednesday (Thursday AEST) amid hopes about tariff deals being struck with Japan and the European Union with the Dow Jones jumping 1.1%, the S&P 500 rising 0.8% and the Nasdaq Composite gaining 0.6% rise.
The markets closed before quarterly earnings reports from the Magnificent Seven technology stocks Alphabet and Tesla.
The Australian share market had finished up on Wednesday and near record peaks with a rally in the mining sector and a rebound by the major banks pushing the S&P/ASX 200 index up 0.7% to 8,737.2.
Chief CommSec Economist Ryan Felsman said although ASX futures trading pointed to a higher start the ASX would potentially be restrained by lower oil and gold prices and lower quarterly earnings from Macquarie Group (ASX: MQG).
“So on the back of that we could see some mixed fortunes for the banking sector, which has been under pressure of late with the rotation out of the Aussie banks to the more relatively attractively priced mining sector,” he said.
Noting the Australian sharemarket had “run hard” partly due to interest rate cuts he expected interest in the speech today by Reserve Bank of Australia (RBA) Governor Michele Bullock.
She is scheduled to talk at 1pm AEST today amid speculation that the central bank will next month deliver the interest rate cut the market had expected this month.
In Australian fixed interest markets, the Australian Government bond yield curve steepened as 10-year rates rose 0.14% to 4.333% and two-year rates fell 0.15% to 3.357%.
