Australian shares are positioned to continue their upward trajectory on Wednesday, buoyed by a strong night on Wall Street where investors returned from a long weekend to take heart from an easing of trade uncertainty.
Future trading indicated the main Australian market index would rise by 0.6% with the S&P/ASX 200 June share price index contract quoted 51 points above the previous settlement at 8,488 points at 9:40 am AEST (11:40 pm GMT Tuesday).
US stocks performed strongly on Tuesday (Wednesday AEST) as investors returned from the three-day holiday weekend buoyed by a surprise improvement in consumer confidence and President Donald Trump's latest backdown on tariffs.
The Dow Jones Industrial Average gained 1.8%, the S&P 500 added 2.1% and the Nasdaq Composite surged 2.5% as investors cheered Trump’s decision to delay a planned 50% tariff on the European Union.
This has kept spirits high in Australia where the sharemarket touched a new three-month high on Tuesday, with the S&P/ASX 200 rising 0.56% to 8,407.6 as information technology led six of the 11 sectors higher.
Morgans Financial private client adviser Lachlan Walsh said the turnaround in share markets had been stronger than most people expected and indicated investors expected the United States to finalise tariff agreements with its trading partners.
“There was only about a three- or four-day period to buy stuff at the bottom before it bounced back up,” he said.
“It is a little bit surprising that everyone's betting on a deal being done.”
He said as the market rebounded demand was initially high for consumer discretionary companies directly exposed to China such as Breville Group Limited (ASX: BRG) and Lovisa Holdings (ASX: LOV).
But now investors are interested in quality names such as REA Group (ASX: REA), Goodman Group (ASX: GMG) and CAR Group (ASX: CAR).
Announcements scheduled for today include monthly consumer price index (CPI) data and earnings results from Fisher & Paykel Healthcare (ASX: FPH), Goodman Group Infratil (ASX: IFT) and Web Travel Group (ASX: WEB).
In the fixed interest market, the Australian Government bond yield curve flattened as 10-year rates dropped 0.09% to 4.288% while two-year rates added 0.09% to 3.331% respectively.
