Australian shares seen higher despite Middle east tensions

The news: The Australian sharemarket is set to start higher, tracking gains on Wall Street on Friday, although sentiment will remain cautious amid renewed geopolitical tensions in the Middle East.

The numbers: The Dow Jones index closed 0.87% higher on Friday, while the broader S&P 500 gained 1.18% while the tech-heavy Nasdaq added 1.6%, both registering their biggest daily percentage gains since late August. In the local market, ASX 200 futures were trading 58 points or 0.83% higher at 7037 points at 0700 AEST on Monday.

The context: The gains on Wall Street came after jobs data showed US employment increased in September but also showed a moderation in wages, leading some analysts to consider that the Federal Reserve may hold rates again in November. That could set the tone for the local market; however investors are likely to be cautious as they brace for higher oil prices and gains for safe-haven assets after Israel retaliate with air strikes on the Palestinian enclave of Gaza after bloody attacks by Islamist group Hamas on Saturday that killed hundreds.