Share prices in Australia are expected to ease back on Friday from record highs while remaining above the 9,000 point barrier after credit quality and other concerns pushed Wall Street equities benchmarks down overnight.
The Australian Securities Exchange’s (ASX) S&P / ASX 200 index should begin trading at 10 am AEDT (11 pm Thursday GMT) about 0.3% under the previous close, according to ASX futures trading.
The December share price index contract was quoted 31 points under the previous settlement at 9,068 at the time of writing.
Burrell Stockbroking wealth adviser Adam Dight said the United States stock market was being pressured by negative influences, including the government closure, trade uncertainty, concerns about regional bank loan quality and unemployment.
“It's normal for a market to fall 2% after it’s had a big rally,” he said.
Dight was surprised the ASX had broken through 9,000 points on Thursday, given corporate earnings did not justify the increase, but expectations had increased of another interest rate cut.
“I'd expect the market to try and get back below 9,000 soon and try again (to break through it) later,” Dight said.
Stocks in New York had ended down on Thursday (Friday AEDT) as worries about the quality of regional bank loans unsettled investors already concerned about U.S.-China trade tensions.
The Dow Jones Industrial Average lost 0.7%, the S&P 500 dropped 0.6% and the Nasdaq Composite decreased 0.5%.
"I think that there's some level of minimal nervousness associated with the credit markets," LNW Chief Investment Officer Ron Albahary was quoted in a Reuters story as saying.
"If you've been doing this long enough, you don't ignore anything that might be a yellow flag in the credit markets."
The Australian sharemarket finished at a record high on Thursday after higher-than-forecast unemployment numbers lifted hopes of an interest rate cut from the Reserve Bank of Australia (RBA) at its next meeting.
The S&P/ASX 200 Index jumped 0.9% to 9,068.4 points.
The Australian Government bond yield curve tilted down as two-year rates were flat at 3.329% while 10-year rates dropped 0.07% to 4.137%, at the time of writing.
