Higher opening expected after US gains
THE Australian market is set to open higher on Monday morning following gains in US stocks on Friday and some positive comments by political leaders.
AMP Capital's chief economist Shane Oliver said US stocks seemed to get a boost out of talks on Friday between President Barack Obama and Democrat and Republican party leaders regarding the so-called ''fiscal cliff'', which refers to large tax hikes and spending cuts that will automatically come into force on January 1 unless legislation is changed.
The Dow Jones closed up 0.37 per cent at 12,588.30, the broader S&P 500 was 0.48 per cent better at 1359.88 and the tech-heavy Nasdaq improved 0.57 per cent to 2853.13.
Futures markets are tipping the Australian market will open as much as 0.3 per cent higher; meanwhile the Australian dollar was last trading steady at US103.45¢.
Global markets have been dominated in recent weeks by talk about the cliff, which is expected to send the world's largest economy back into recession if political opponents can't reach a compromise.
''The key person there, the Republican House of Representatives leader John Boehner, described talks as constructive, providing a bit of confidence that there will be some sort of solution …'' Dr Oliver said. ''It will probably remain another nervous week …'' With the Thanksgiving holiday in the US later in the week, trade was expected to be thin, he said.
The outbreak of violence in the Middle East is also making markets nervous, with oil prices rising on Friday on concerns about supply.
The Australian sharemarket closed lower on Friday, with the S&P/ASX200 index down 12.4 points, or 0.28 per cent, at 4336.8. This took the loss to 2.8 per cent for the week.