As US investors sit on their hands, the local market is likely to shrug off uncertainty to make early gains on light volumes.

With Hurricane Sandy closing down US markets overnight, and again tomorrow night, there really is very little to help us preview Australian trade. Judging by the very low volumes that transacted in Europe, it looks like the local market may shrug off a bit of weakness caused by the heightened uncertainty.

European markets were all weaker with the French CAC 40 the worst, down 0.80 per cent. Elsewhere, the German DAX and London’s FTSE 100 fell 0.40 per cent and 0.20 per cent respectively.

The benchmark S&P/ASX 200 is called to open the session around the 4495 level, approximately 20 points above yesterday’s close. It looks like there was a quite a bit of selling in the last hour of Australian trade yesterday, hence the reason it looks likely to open higher this morning.

Generally speaking, energy related stocks were relatively well supported overnight given the huge chance for energy and power disruption while insurance names came under pressure as participants pondered how much damage bills may be. QBE Insurance Group, which came under pressure yesterday, is the main Australian insurer exposed to the US east coast.

Volumes and trade will probably follow the offshore lead and be very light indeed as everybody waits to see the real extent of damage. Markets hate high levels of uncertainty like this, with traders very happy to sit on their hands and wait until further information is available.

Hurricane Sandy is expected to make US landfall around mid-morning Australian time so I’m sure there will be plenty of news flowing in as the initial reports of damage.

There is very little in the way of economic news either, with the only maybe being the tentative release of the HIA new home sales around mid-morning. Otherwise, the only other releases due in Asia of note are Japanese household spending, industrial production and unemployment rate at 10.30am AEDT. The Bank of Japan Monetary Policy statement, press conference and interest rate decision are also pencilled in for 5pm AEDT.

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