Australian shares to start lower after Wall Street drop
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The news: The Australian sharemarket is poised to start lower, with local investors taking cues from declines on Wall Street amid a fall in technology shares and weak demand in a 10-year US Treasury notes auction.
The numbers: The Dow Jones index ended 0.6% lower, while the broader S&P 500 lost 0.77% and the tech-heavy Nasdaq dropped 1.05%. In the local market, ASX 200 futures were down 33 points or 0.43% to 7,598 points at 7am AEST on Thursday.
The context: US stocks got early support following comments from Bank of Japan Deputy Governor Shinichi Uchida that the central bank would not raise rates when financial markets are unstable. The BOJ's surprise rate hike on July 31 had sparked a global stocks rout as investors unwound their sharp yen carry trade positions.
However, tech shares began to lose steam in afternoon trading and equities pared gains further after the weak Treasury auction.
Investors have been worried about a possible US recession and weaker forecasts from some big US companies, among other factors. Markets await more commentary on monetary policy from US central bank officials next week.
In the local market, traders will be focused on a speech by RBA Governor Michele Bullock.
What they said: "There's just a lot to worry about over the next eight weeks or so, so I'm expecting more volatility. I wouldn't be surprised if after a few days of rally you have another small selloff," Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia told Reuters.
The source: Reuters
