Aust stocks set to open lower

Local market poised for a weak start as fears over United States budget negotiations, Italian crisis weigh.

The Australian stock market is expected to open lower as the budget debate rages in the US and Italy's government dips into crisis.

Commsec senior analyst Craig James says continued negotiations over the US budget, which could force a shutdown of some services, is generating uncertainty.

"If they don't come to an agreement today, that could provide even more weight on our markets," Mr James said.

On Friday, the benchmark ASX200 index added 12.6 points, or 0.24%, to 5,307.1 while the broader All Ordinaries index gained 14.1 points, or 0.27%, to 5,302.3.

The futures market was pointing to a fall of 13 points at Monday's open, Mr James said.

The political crisis that engulfed Italy's fragile coalition government on Saturday, when centre-right ministers resigned at the urging of their leader and former prime minister Silvio Berlusconi, added more pressure.

"It's not huge in the scheme of things but it's certainly more of a negative than a positive," Mr James said.

Markets in the US and Europe finished lower on Friday, while increases in gold and base metal prices last week were offset by flat oil prices, he said.

But September had seen a lift in local business and consumer confidence and an improvement in the global economy.

"Overall the global and domestic economy continued to improve," Mr James said.

Economic data to be released this week include retail trade figures and building approvals.

Interest rates are unlikely to change following the Reserve Bank's board meeting on Tuesday, Mr James said, with financial markets giving it just a 6% chance of a rate cut.

"There are pretty firm predictions that the Reserve Bank is going to stay on the interest rate sidelines," he said.