ASX 200 tipped to rise after strong US lead

The Australian sharemarket is tipped to push higher at the open on Monday following solid overseas leads, with banks and energy stocks to lead the charge.

The Australian sharemarket is set for a positive start on Monday following positive overseas leads. Picture: Bloomberg

The Australian sharemarket is tipped to push higher at the open on Monday following solid overseas leads, with banks and energy stocks to lead the charge.

SPI futures are pointing to a 0.4 per cent gain at the start of trade, with the local bourse taking its lead from the strong showing on both US and European markets at the end of last week.

The banks, energy majors and base metals stocks were among those that should lift on Monday, while iron ore and gold would detract from the gains, CommSec chief economist Craig James said.

“We saw the oil price move higher at the end of last week as the US prepares to end some of the travel restrictions in a few weeks time. Doing that will mean greater demand, particularly for aviation fuel,” Mr James said.

WTI crude rose 1.19 per cent to $US82.28 on Friday, while Brent jumped 1 per cent to $US84.86a barrel.

“We also had some really good gains in base metal prices,” Mr James added. “Zinc rose by 8.2 per cent and we saw a 4 per cent rise in the copper price. These are more signs that the reopening is meaning greater demand for metals in the rebuilding phase.”

Financial stocks should also fare well following a lift in US bank share prices on Friday on the back of strong earnings.

In the US, the Dow finished Friday’s session up 1.1 per cent at 35,294, while the S&P 500 ended up 0.75 per cent at 4471 points and the Nasdaq rose 0.5 per cent.

The US economy appears to be on track, with retail sales posting a surprise 0.7 per cent increase in September. Travel-related stocks also had a good day after the White House announced the US will reopen its borders on November 8 to foreign visitors fully vaccinated against Covid-19.

But caution would be in play locally as declines in the gold and iron ore prices weigh on those sectors, Mr James warned.

The gold price fell almost $US30 an ounce, or 1.6 per cent, to $US1768 on Friday, while iron ore dropped 55c to $US125.45 a tonne.

China’s economic growth figures out on Monday will also be closely watched.

The National Bureau of Statistics is due to issue China’s September quarter economic growth (GDP) estimate alongside September readings for retail sales, production and unemployment.

Investors will be looking to gauge how much the economy has slowed in response to the rising Delta cases, supply chain disruptions and a government crackdown on industries ranging from technology to property.

On the local front, ANZ and Roy Morgan are due to release the weekly consumer confidence index on Tuesday, while the RBA releases the minutes from its October meeting on the same day.