Technology shares may be the only highlight on the Australian Securities Exchange (ASX) on Thursday, with share prices otherwise expected to open little changed.
This came after a mixed night on Wall Street where two of the three major market benchmarks closed at new highs as investors were impressed by company results and hopes of progress in U.S.-Iran peace talks.
The ASX 200 was expected to open just three points over the previous close, based on ASX trading of the June share price index futures contract.
While the Dow Jones Industrial Average dipped 0.2% on Wednesday (Thursday AEST), the S&P 500 added 0.8%, and the Nasdaq Composite soared 1.6% to new peaks.
“It’s pretty extraordinary that they’re at record highs in the S&P500 and the Nasdaq. They have basically priced in that the war will end soon,” CommSec Equity Market Strategist James Gruber said.
“That’s been pretty clear for a little while. They’ve also got corporate earnings coming in which have mostly been favourable.”
He said the ASX was not far off record highs, as it followed overseas markets in bouncing off recent lows and was discounting a short war in the Middle East.
“I think you’re going to see a further rebound in tech stocks in Australia, and they had a really good day yesterday,” Gruber said.
Falcon Wealth Planning CEO and founder Gabriel Shahin said many investors had looked at that recent U.S. market correction “simply as a sale”.
"When you strip away the headlines, there’s nothing fundamentally wrong with our businesses or the broader economy. Investors are looking at the resilience of the S&P and realizing the engine is still humming," he was quoted as saying in a Reuters article.
The Australian market had finished slightly higher on Wednesday, with the ASX 200 gaining 0.1% to 8,978.7 points and technology stocks performing best.
In fixed interest markets, yields on Australian Government bonds fell, with two-year rates dropping 0.98% to 4.639% and 10-year rates easing 0.32% to 4.953% at the time of writing.
