Market to bounce on global lead

AUSTRALIAN stocks are expected to open strongly today following hefty gains on world markets.

AUSTRALIAN stocks are expected to open strongly today following hefty gains on world markets.

US and European stocks surged on Saturday on signs that European leaders were mustering an all-out assault on the eurozone debt crisis.

The Dow Jones Industrial Average closed up 190.45 points, or 1.48 per cent, at 13,078.38, breaching the 13,000-point closing level for the first time since early May.

It came as the leaders of Germany and France added their weight to the battle to preserve the European single currency, issuing a joint statement promising to do everything they could to stop the 17-country bloc from breaking up.

AMP head of investment and strategy Shane Oliver said the overseas moves had led the ASX 200 futures index 47 points higher.

"As a result of further gains in US and European shares, ASX 200 futures rose another 1.1 per cent, pointing to a solid opening for the Australian sharemarket on Monday," Dr Oliver said.

In economics news this week, new homes sales and building approvals figures will be released tomorrow.

Market watchers are expecting home sales to remain soft and a sharp fall in building approvals.

In Berlin, Germany has rejected talk of a possible application from Spain for the eurozone's bailout fund to buy the country's bonds.

Last week, European Central Bank head Mario Draghi promised to do "whatever it takes" to preserve the euro. The German and French leaders made similar comments.

Those comments raised expectations the ECB or the rescue fund might step in to buy Spanish government bonds and lower the country's borrowing costs.

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