Boris Johnson’s UK win, US-China trade breakthrough to boost Australian shares
Australian shares are expected to start the week on a positive note after two major uncertainties that have been undermining the global economy were finally lifted.
Heading into the week, phase one of the hotly disputed trade negotiations between the US and China appear to have been settled, suspending $US160 billion ($233 billion) of damaging tariffs on Chinese goods that were due to have started on December 15.
At the same time, UK Prime Minister Boris Johnson was swept back to power in Thursday’s British election with a thumping majority, suggesting the country will finally be leaving the European Union on January 31 after years of political wrangling.
“Markets have the potential for a Santa Claus rally into Christmas with those two tail risks receding,” Commonwealth Securities senior economist Ryan Felsman said on Sunday.
He said the fact that the tariffs are suspended, “will provide some positive momentum going into Monday’s trading here in Australia”.
US shares hit record highs at one stage on Friday on the announcement of the US- China trade deal before finishing steady.
The Dow Jones Industrial Average rose 3.33 points, or 0.01 per cent, to 28,135.38, the S&P 500 gained 0.23 point, or 0.01 per cent, to 3,168.8 and the Nasdaq Composite added 17.56 points, or 0.2 per cent, to 8,734.88.
Australian share futures were trading 39 points higher at 6782.
The benchmark S&P/ASX200 index closed on Friday up 30.9 points, or 0.46 per cent, to 6,739.7 points, while the broader All Ordinaries was up 33.8 points, or 0.5 per cent, to 6,844.6 points.
Just before local trading gets under way, federal Treasurer Josh Frydenberg will hand down his mid-year budget review, which is expected to show the government remains on course for the first surplus in 12 years, but downgrades to economic growth forecasts.
The final major economic event of the year on the Australian calendar will be Thursday’s jobs figures for November, which are expected to show the unemployment rate unchanged at 5.3 per cent.
AAP
Most Viewed in Business
Source: Thanks smh.com