Higher United States stock indices and commodities prices have set the Australian sharemarket to rebound on Tuesday.
Australian Securities Exchange (ASX) futures trading indicated the main share price index would open higher with the S&P/ASX 200 June contract quoted 69 points (0.81%) above the previous settlement at 8,503.00.
The positive tone was set overseas with U.S. equities ending higher after a choppy session as investors overlooked growing trade tensions and as prices rose for crude oil, gold, copper and aluminium.
Small gains were recorded on Wall Street on Monday (Tuesday AEST) despite tit-for-tat claims between the U.S. and China with the Dow Jones Industrial Average adding 0.1%, the S&P 500 putting on 0.4% and the Nasdaq Composite jumping 0.7%.
Rising tensions over tariffs undermined the Australian market on Monday, with the S&P/ASX 200 index losing 0.2% to 8,414.1 as eight of the 11 major sectors, including energy, ended down.
Chief CommSec Economist Ryan Felsman said the Australian market was set to open higher on Tuesday after a muted start to the week on Monday, as rising oil prices boosted energy companies and technology shares traced a rebound on Wall Street.
He noted gold, copper and aluminium prices were also stronger overnight.
“The commodity space should be good for Aussie shares today given we’re obviously very weighted towards resources and also supporting the market will be the energy producers,” Felsman said.
In economic news today the market will be examining the minutes of the Reserve Bank of Australia’s May monetary policy meeting to see how close the central bank came to cutting official rates by 50 basis points rather than 25 basis points (bp).
Felsman noted that the market priced the chances of another 25 bp reduction in July at more than 70%.
In company news, Elders (ASX: ELD) goes ex dividend and eyes will be on the performance of Washington H. Soul Pattison (ASX: SOL) and Brickworks (ASX: BKW) which jumped on Monday after announcing a A$14 billion (US$9.0 billion) merger.
Turning to fixed interest markets, yields were lower on Australian Government bonds, with 10-year rates edging down by 0.42% to 4.291% and two-year rates losing 0.66% to 3.311%.
