The Australian sharemarket is set to retreat from record highs, with a plunge in the gold and silver prices overnight likely to undermine mining stocks.
The S&P/ASX 200 Index should start about 0.5% below the previous close when trading resumes on the Australian Securities Exchange (ASX) at 10:00 am AEDT (11:00 pm Tuesday GMT).
This estimate is based on ASX futures trading with the S&P/ASX 200 index December share price index contract quoted 47 points below the previous settlement at 9,056 at the time of writing.
U.S. stocks closed mixed on Tuesday (Wednesday AEDT) as strong profit results pushed the Dow Jones Industrial Average to a record finish, and technology stocks were undermined by new China trade worries.
The gold and silver prices dived by more than 5% and almost 7% respectively overnight, providing a negative backdrop for ASX trading.
“The plunge in both silver prices and gold prices are expected to weigh on our local market today but the energy sector could provide some support,” Chief CommSec Economist Ryan Felsman said.
The Dow advanced 0.5% at a new high, the S&P 500 was little changed, and the Nasdaq Composite lost 0.2%.
Strong results from Coca-Cola, General Motors, GE Aerospace and 3M were among the stocks that lifted the Dow.
“We're at a little bit of a point of indecision, where nobody feels particularly strongly about anything," Simplify Asset Management Chief Strategist Michael Green was quoted in a Reuters story as saying.
"The earnings are better than expected as companies continue to gain slightly in terms of margins, which suggests that (companies) have to be passing through the tariffs or pushing the tariffs back onto the importers.”
The Australian sharemarket reached a new peak on Tuesday with the S&P/ASX 200 ending up 0.7% at 9,094.7 points.
Stocks in focus today include Woodside Energy (ASX: WDS), which has issued its third quarter report, and REA Group (ASX: REA), Reliance Worldwide Corporation (ASX: RWC) and Fletcher Building Limited (ASX: FBU), which hold their annual general meetings.
The Australian Government bond yields rose across the curve as two-year rates added 0.24% to 3.333% and 10-year rates gained 0.15% to 4.125%, at the time of writing.
