Australian shares to open higher after Wall Street gains
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The news: The Australian sharemarket is likely to track gains overnight on Wall Street, where major indices ended higher amid the conflict between Israel and the Palestinian Islamist group Hamas.
The numbers: The Dow Jones index rose 0.60% overnight, while the broader S&P 500 gained 0.63% while the tech-heavy Nasdaq ended 0.4% higher, with the energy sector the biggest gainer. In the local market, ASX 200 futures were trading 30 points or 0.43% higher at 7032 points at 0700 AEDT on Tuesday.
The context: Investors appeared to refocus on more US-centric matters, helped by more dovish comments from Federal Reserve official. They indicated that recent gains in yields on long-term US Treasury bonds, which directly influence financing costs for households and businesses, could steer the Fed from further hikes in its short-term policy rate. Traditional safe-haven assets like gold were in demand, while oil prices also rose.
What they said: "The stock market and investors are focused on two things, the economy and earnings. The US economy is not slowing and earnings are expected to come out of a recession with reports starting this week."
"Those fundamentals are more powerful in the market than terrible geopolitical headlines from the weekend just as they were more powerful than a strong jobs report and worries about the Fed on Friday." John Augustine, chief investment officer at Huntington National Bank in Ohio, told Reuters.
The source: Reuters
