Wall Street rally to buoy Australia shares

Australian shares are tipped to open in the positive ahead of Christmas, buoyed by a rally on international markets.

The futures market is expected to open up 10 to 15 points on Monday, AMP Capital’s chief economist Shane Oliver said on Sunday.

AMP Capital chief economist Shane Oliver
AMP Capital chief economist Shane OliverCredit:Louie Douvis

“The more likely scenario is we will open 10 to 15 points constant with the rally we saw with the US and Europe, which would be about 0.2 to 0.3 per cent,” he said.

“The lead-in from Wall Street and Europe is positive. That’s why I think we will have a positive start tomorrow.”


The S&P 500 – the main benchmark in the US – closed on Friday up about 15.8 points or 0.5 per cent, and the Dow Jones closed up 78.1 points or 0.3 per cent.

Australian stocks had a softer end to last week. The benchmark S&P/ASX200 index finished on Friday 16.8 points, or 0.25 per cent lower, at 6,816.3 points. The broader All Ordinaries slipped 16.5 points, or 0.24 per cent, to 6,926.1 points.

ASX SPI Futures Index on Friday was pointing to a soft open, with shares drifting down 0.4 per cent to 6,276, though that was before the Wall Street rally on Friday night. The Aussie dollar is expected to stay stable at 69 US cents.

“The more likely scenario is we have a modest gain, sometimes the future market can give the wrong signals,” Mr Oliver said.

“Subsequent to the fall in our market on Friday, which was down about 16 points, the US market then rallied as did Europe. Overall Friday was a pretty good night on the market which capped off a pretty strong week.”

The end of the first phase of the trade war between China and the US is also good news for the market, he added.

Two public holidays in Australia this week will add to a “pretty quiet week”, before a “Santa Clause” rally in the market wraps up on New Year’s Day, he said.

Monday trading will operate to normal hours, though on Christmas Eve the bourse will close early at 2.10pm and re-open on Friday.

— with AAP.

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