Share prices in Australia opened virtually flat on Friday despite a positive mood on Wall Street where investors returned to focusing on the artificial intelligence (AI) boom rather than renewed tensions in the Middle East.
By 10:25 am AEST (12:25 am GMT), the ASX 200 index was down just 5.6 points or 0.1% at 8,757.4.
This was despite a strong session in New York where all three major U.S. benchmarks finished higher despite fresh military strikes by the United States and Iran in the Gulf that reignited geopolitical concerns.
The technology-laden Nasdaq Composite index led the gains on Thursday (Friday AEST), rising 1.3%, followed by the S&P 500, which added 0.8%, and the Dow Jones Industrial Average, which gained 0.3%.
A fall in oil prices overnight helped temper inflation concerns and allowed investors to refocus on surging demand for AI infrastructure.
The Australian market has rebounded over the last five days with investors redeploying dividend payments by purchasing oversold stocks, according to Burrell Stockbroking wealth adviser Adam Dight, who nonetheless saw it as a “dead cat bounce”.
“If you stretch a band too far it has to come back,” he said.
He remained bullish about the prospects for equities with U.S. companies expected to report earnings growth of 12-14% in the next quarterly reporting period and rejected suggestions technology shares were overvalued.
“It’s the cheapest bubble in history. It’s not expensive because the tech stocks have actually grown into their share prices,” he said.
The Australian sharemarket had closed down on Thursday due to worries the renewed conflict between the U.S. and Iran might reignite global inflation pressures with the ASX 200 Index dropping 0.3% to 8,762.5 points.
In fixed-interest markets, yields on Australian Government bonds fell, with two-year rates down 1.31% to 4.510% and 10-year rates off 0.95% to 4.885% at the time of writing.
