ASX set for weak open as Wall Street takes a breather
The Australian sharemarket is tipped to open weaker after US markets came off their latest record highs, as cautious investors took money off the table and weighed up the prospects of the COVID stimulus bill passing the US senate.
The ASX SPI futures, down 25 points or 0.4 per cent to 6611 at 7:30am AEDT, pointed to Australian investors following suit, after the market closed out its first post-Christmas session in the black on Tuesday.
The Australian dollar was 0.4 per cent higher at US 76.10 cents.
Overnight, Wall Street reversed early gains, backing down from the previous session’s record closing highs, while crude oil gained ground as investors looked to Washington for signs that an enhanced stimulus package would pass a Senate vote.
The US House of Representatives voted on Monday to meet President Donald Trump’s demand for $2,000 direct payments to Americans as part of the recently signed fiscal relief bill, sending the measure to the Republican-controlled Senate.
Senate Majority Leader Mitch McConnell blocked an effort to approve the direct payments by unanimous consent, but said the chamber would address the increased stimulus checks this week.
All three major US stock indexes oscillated amid light trading volume, but were trending lower or flat as market participants balanced near-term challenges with longer-term hopes for economic recovery and a return to healthy demand.
The Dow Jones Industrial Average was down 23.48 points, or 0.1 per cent, to 30,380.49, the S&P 500 lost 3.24 points, or 0.1 per cent, to 3,732.1 and the Nasdaq Composite dropped 48.38 points, or 0.4 per cent, to 12,851.04.
Meanwhile European stocks maintained their positive momentum overnight, extending their year-end rally to close at a 10-month high. Investor sentiment has been boosted by the prospect of fresh stimulus and the European Union vaccination program getting under way.
The pan-European STOXX 600 index rose 0.76 per cent and the UK’s FTSE 100 rallied 1.6 per cent on the first day of trading since the Brexit deal was sealed, closing up 100.5 points at 6,602.6 – the highest level since early March. The MSCI’s gauge of stocks across the globe gained 0.29 per cent.
Crude prices advanced on hopes that pandemic aid could boost demand and spur economic growth.
US crude rose 0.8 per cent to settle at $US48 per barrel and Brent settled at $US51.09 per barrel, up 0.45 per cent on the day.
Spot gold added 0.4 per cent to $1,877.76 an ounce.
With Reuters
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Technology and business journalist, with digital experience.
Stints at Business Spectator, The Australian.
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