InvestSMART

After a flat start market should pick up on expected good news from EU

The Australian sharemarket is expected to open the week flat, with traders likely to be cautious following volatility on Wall Street. AMP Capital chief economist Shane Oliver said traders would be weighing up negative signals from the US market against stronger commodity prices, which would help resource stocks. "Consequently, the futures contract for the ASX 200 was flat on Friday, suggesting a pretty flat start to trade on Monday," Dr Oliver said. Australian shares finished lower on Friday, dragged down by the banks. The ASX 200 Index was down 9.6 points, or 0.19 per cent, at 5055.2, a 1.2 per cent fall for the week. The All Ordinaries was down 8.3 points, or 0.16 per cent, at 5038.8. Dr Oliver said traders would also be looking closely at European GDP data for the June quarter due out on Wednesday. "If it's positive, as expected, it will add to confidence that the global economy is on the mend, which should bode well for the local market," he said.
print
InvestSMART
By InvestSMART · 12 Aug 2013
print
Share
InvestSMART
By InvestSMART ·
12 Aug 2013
Share
comments Comments
print Print
The Australian sharemarket is expected to open the week flat, with traders likely to be cautious following volatility on Wall Street. AMP Capital chief economist Shane Oliver said traders would be weighing up negative signals from the US market against stronger commodity prices, which would help resource stocks. "Consequently, the futures contract for the ASX 200 was flat on Friday, suggesting a pretty flat start to trade on Monday," Dr Oliver said. Australian shares finished lower on Friday, dragged down by the banks. The ASX 200 Index was down 9.6 points, or 0.19 per cent, at 5055.2, a 1.2 per cent fall for the week. The All Ordinaries was down 8.3 points, or 0.16 per cent, at 5038.8. Dr Oliver said traders would also be looking closely at European GDP data for the June quarter due out on Wednesday. "If it's positive, as expected, it will add to confidence that the global economy is on the mend, which should bode well for the local market," he said.
Google News
Follow us on Google News
Go to Google News, then click "Follow" button to add us.
Follow us
Share this article and show your support
Free Membership
Free Membership
InvestSMART
InvestSMART
Keep on reading more articles from InvestSMART. See more articles
Join the conversation
Join the conversation...
There are comments posted so far. Join the conversation, please login or Sign up.

Frequently Asked Questions about this Article…

The market is set for a flat start because traders are cautious after volatility on Wall Street. AMP Capital chief economist Shane Oliver noted investors are weighing negative signals from the US against stronger commodity prices, and the ASX 200 futures contract was flat on Friday — suggesting a pretty flat open.

Volatility on Wall Street sends negative signals that Australian traders watch closely. According to the article, those US market jitters can make investors cautious and help produce a flat or weaker start for the ASX 200 as they reassess risk.

Stronger commodity prices can help resource stocks by improving revenue outlooks for miners and energy companies. The article explains traders are balancing negative US signals against stronger commodity prices, which would be a positive for resource-focused stocks.

Australian shares finished lower on Friday. The ASX 200 fell 9.6 points (0.19%) to 5,055.2 and was down about 1.2% for the week. The All Ordinaries dropped 8.3 points (0.16%) to 5,038.8.

The article says banks were the main drag on the market on Friday. It reports that Australian shares were pulled down by the banks, though it does not give specific reasons for the bank weakness.

Investors should watch European GDP data for the June quarter due on Wednesday. The article notes that if the GDP print is positive as expected, it could boost confidence that the global economy is recovering and should bode well for the Australian market.

A flat ASX 200 futures contract suggests a quiet or neutral start to the trading day — neither widespread buying nor selling is expected at open. The article cites the flat futures reading on Friday as a sign of a likely pretty flat start on Monday.

Shane Oliver is the chief economist at AMP Capital. In the article he advised that traders are balancing negative signals from the US with stronger commodity prices, pointed to the flat ASX 200 futures as an indicator of a flat start, and highlighted the importance of upcoming European GDP data for market confidence.