The rebound in Australian share prices is set to be short lived with the market expected to follow the example set on Wall Street overnight and plunge when it opens on Friday.
With no major corporate or economic news scheduled the Australian Securities Exchange (ASX) is likely to mimic the performance of United States stocks, which resumed their slide on Thursday (Friday AEDT).
The S&P/ASX 200 should begin 1.6% below the previous close, based on ASX futures trading, which quoted the December contract of the S&P/ASX 200 share price index 142 points under the previous settlement at 8,429 points at the time of writing.
Burrell Stockbroking wealth adviser Adam Dight said investors thinking of selling part of their portfolio before Christmas should begin today.
“There’s just no news. You need news to keep things frothy. I think the sellers (will) just dominate from here until Christmas,” he said.
Investors were likely to pause until the next quarterly reporting season in the United States in three months, as stocks like market-leading artificial intelligence giant Nvidia traded sideways to allow earnings growth to lower the high earnings multiple.
The three main indexes in New York fell on Thursday as the brief rally in highly-priced technology stocks spurred by Nvidia's earnings result faded.
The Dow Jones Industrial Average ended down 0.8%, the S&P 500 dived 1.6% and the tech-heavy Nasdaq Composite plunged 2.2%.
"This situation is fine for now, but what happens in three months' time when the market waits with bated breath for Nvidia's next quarterly earnings update,” AJ Bell’s Head of Markets Dan Coatsworth was quoted by Reuters saying in this article.
“Even though Nvidia's profits and cash flow remain as healthy as an ultramarathon runner, there are some red flags to consider.”
The Australian sharemarket bounced off a five-month low on Thursday in the positive aftermath of the powerful Nvidia quarterly result, with the S&P/ASX 200 surging 1.2% to 8,552.7 points.
Companies to watch today include Reece Group (ASX: REH) and Qube Holdings (ASX: QUB), which hold their annual general meetings, and Orica (ASX: ORI), which trades ex dividend.
In the bond markets, yields on Australian Government bonds eased with two-year rates dropping by 0.05% to 3.692% and 10-year rates slipping 0.02% to 4.460%.
