Positive signs from China, US to buoy sharemarket
Australian futures markets are pointing to a 20-point gain at the open after the US unemployment rate fell to 7.7 per cent on Friday.
AMP Capital economist Shane Oliver said investors would be buoyed by the momentum in the US and gains in Europe on Friday.
"The only complication is the mixed data released from China yesterday which may confuse investors because inflation was slightly higher and industrial production and retail sales were somewhat weaker, particular retail sales," Dr Oliver said.
"That could create some confusion and act as bit of a drag on resources stocks, depending on how investors interpret the Chinese data.
"But overall I'd expect we'll have a fairly decent gain."
Chinese inflation hit a 10-month high last month while growth in industrial production and retail sales slowed, official data released on Saturday showed.
Meanwhile, the Dow Jones Industrial Average set a record for the fourth straight session on Friday helped by solid jobs data that was nonetheless seen as unlikely to move the Fed to tighten monetary policy. The Labour Department reported that the economy generated a net 236,000 new jobs in February, far more than expected, pulling the unemployment rate down to 7.7 per cent from 7.9 per cent.
At the local close on Friday, the key S&P/ASX 200 index was 14.2 points, or 0.28 per cent, higher at 5123.4, while the broader All Ordinaries index was up 14.4 points, or 0.28 per cent, at 5137.5. Both indices finished the week almost three-quarters of a per cent higher.
National Australia Bank's monthly business survey is due on Tuesday followed by the Westpac/Melbourne Institute survey of consumer sentiment and housing finance data on Wednesday.
National jobs figures are due out on Thursday.
Myer will release its half-year profit result on Thursday, with investors and analysts looking for an insight into retail conditions over Christmas and how discretionary retailers such as Myer performed in the crucial holiday trading season. David Jones will issue its half-year result on March 20.
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The Australian sharemarket was tipped to open higher after strong US jobs figures and gains in Europe lifted sentiment. Futures were pointing to about a 20‑point gain at the open, supported by the US unemployment rate falling to 7.7% and solid jobs growth.
The US Labour Department reported a net 236,000 new jobs in February and the unemployment rate fell to 7.7%, helping the Dow Jones set a record for a fourth straight session. That solid jobs data buoyed markets and helped push Australian indexes higher, though it was widely seen as unlikely to force the Federal Reserve into tighter policy.
China's official data showed inflation at a 10‑month high while growth in industrial production and retail sales slowed. According to AMP Capital economist Shane Oliver, that mix could confuse investors and potentially act as a drag on resources stocks, depending on how the Chinese data is interpreted.
At the local close on Friday the S&P/ASX 200 was at 5,123.4, up 14.2 points (0.28%), and the All Ordinaries was 5,137.5, up 14.4 points (0.28%). Both indices finished the week almost three‑quarters of a percent higher.
Investors should watch the National Australia Bank monthly business survey due Tuesday, the Westpac/Melbourne Institute consumer sentiment survey and housing finance data on Wednesday, and national jobs figures due out on Thursday.
Myer will release its half‑year profit result on Thursday and investors and analysts will look for insight into retail conditions over Christmas and how discretionary retailers like Myer performed during the crucial holiday trading season. David Jones is also due to issue its half‑year result on March 20.
Shane Oliver said investors would be buoyed by momentum in the US and gains in Europe, but the mixed Chinese data—higher inflation alongside weaker industrial production and retail sales—could create some confusion and slightly drag on resources stocks. Overall he expected a fairly decent gain for the market.
Despite the strong US jobs numbers, the article notes that the data was seen as unlikely to prompt the Federal Reserve to tighten monetary policy, even though it helped lift markets.
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