Aust stocks set to open higher

Slightly stronger start for the week expected for ASX on back of Wall Street record.

The Australian share market is expected to open slightly higher this week on the back of gains in global markets.

AMP chief economist Shane Oliver is tipping a lift of five to 10 points at the local open.

The S&P 500 finished the week above 1,900 for the first time after a positive report on US new-home sales helped to push Wall Street stocks broadly higher.

The index advanced 0.4% on Friday and the Dow Jones also rose 0.4%.

"European shares were also up by a similar amount on Friday so the lead-in for our market tomorrow is reasonable," Dr Oliver said.

Gains in global stocks appeared to offset a drop in the iron ore price, which last week fell below US$100 a tonne to $US99.80.

At Friday's local close, the benchmark S&P/ASX200 index was 12.9 points, or 0.24%, higher at 5,492.8, while the broader All Ordinaries index was up 12.2 points, or 0.22%, at 5,470.3.

Dr Oliver expects the share market to remain volatile all week while continuing its slightly upward trend to finish a touch higher by Friday.

The most important news for Australian investors is likely to be the release of quarterly business investment data on Thursday, which is expected to show the continuing erosion of the mining boom.

Total investment is tipped to drop again by as much as 0.5%, after a sharp fall in the December quarter.

Dr Oliver anticipates the negative data will reinforce expectations that interest rate hikes are a long way off and ensure the Australian dollar continues its slow downward slide.

The dollar dipped to 92.31 US cents last week, down from 93.6 US cents the previous week.

"If mining investment is slowing faster than expected then it won't augur that well for the economic outlook here," he said.

"On the flip side, of course, it all means lower interest rates for longer, which is probably something the share market will be happy with."

The bond market is expected to remain steady at about 3.75.

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