Australian share prices are expected to open lower on Monday despite a stronger finish to the week in the United States as investors reassessed geopolitical and inflation risks over the weekend.
Futures trading indicates the benchmark ASX 200 index will begin 0.47% below the previous close, continuing the downward drift witnessed on Friday, with the market cognisant of increased tensions in the Middle East, which lifted crude oil prices.
The weaker indicative opening is based on the June share price index contract being quoted 42 points under the previous settlement at 8,736.000 points at the time of writing.
Little positive benefit was provided by the performance of stocks in the U.S., where the S&P 500 and Nasdaq Composite indexes reached record highs on Friday, supported by jobs data and the price of companies related to artificial intelligence (AI).
While the Dow Jones Industrial Average managed an increase of just 0.02%, the S&P 500 put on 0.8%, and the Nasdaq Composite surged 1.7% on Friday (Saturday AEST), consolidating the outperformance of the U.S. market over the ASX in the last 12 months.
Indications of no breakthrough on peace talks between the United States and Iran, which left the vital oil-transporting channel, the Strait of Hormuz, all but shut, sent oil prices rising.
Strong returns over the last month have helped lift the Nasdaq to a 45.7% rise over a year, versus 30.6% from the S&P, 20.60% by the Dow and just 6.9% in Australia.
The technology-heavy Nasdaq was helped by rises in AI stocks like Nvidia and Sandisk on Friday, along with employment market strength implied by a stronger-than-expected data.
The earnings of S&P index stocks in the first quarter are tipped to climb almost 29% compared with a year earlier, powered by the largest AI companies, according to LSEG I/B/E/S.
"This is an economy that seems hard to wreck," Sage Advisory Services chief investment strategist Rob Williams was quoted as saying in a Reuters article.
ASX-listed stocks to watch include Australia and New Zealand Banking Group (ASX: ANZ), whose shares trade ex-dividend today, and Macquarie Group (ASX: MQG), which reported higher-than-expected full-year results last Friday.
Australian shares dropped on Friday, with the S&P/ASX 200 Index diving 1.5% to 8,744.4 points.
In Australian fixed interest markets, government bond yields rose, with two-year rates up 0.13% at 4.683% and 10-year rates rising 0.22% to 4.983% at the time of writing.
