Bourse tipped for buoyant start on global optimism
AUSTRALIAN stocks are expected to open firmer today as market players react to positive data from China and encouraging news from the US and Europe.
AUSTRALIAN stocks are expected to open firmer today as market players react to positive data from China and encouraging news from the US and Europe.Manufacturing activity in China rose more than expected last month, according to the Purchasing Managers' Index, which rose 2.1 index points to 53.1 points, well above market expectations for a 50.8 result.There was also a positive lead from Wall Street, and futures markets are pointing to an upbeat start when trading begins this morning.CommSec's chief economist, Craig James, said he expected the data from China to help push the Australian bourse higher today."A stronger manufacturing sector in China is very beneficial for our resources sector so mining, energy stocks are likely to get a pretty good boost," Mr James said yesterday."Day by day we are getting more indications that the US economy is picking up momentum and China is now looking a little bit better."That augurs well for a resources exporter like Australia."US stocks recovered from early weakness to finish in positive territory after a report showed US consumer spending rose more than expected in February. The Dow Jones Industrial Average rose 0.5 per cent and the S&P 500 index rose 0.37 per cent. The tech-heavy Nasdaq index fell 0.12 per cent.Economics news is expected to dominate the week, led by the Reserve Bank's monthly board meeting and decision on interest rates tomorrow.All 15 economists surveyed last week expected the central bank to leave the cash rate unchanged at 4.25 per cent, citing the more stable global economic outlook."The Reserve Bank remains in that happy place," Mr James said. "Inflation is under control, growth here in Australia is a little bit below trend and the Australian dollar is pretty comfortable at lower levels."This week's economic releases will include retail sales figures for February, as well as building approvals and trade figures for the same month. Private-sector reports on manufacturing conditions in Australia, Europe, the US are also due for release.The Australian dollar ended the weekend offshore session at US103.58?, down from US103.95? at Friday's local close.AAP