Easing of Victoria lockdown and upbeat overseas leads to boost ASX

The Australian sharemarket is tipped to open higher on Monday following upbeat overseas leads.

The local sharemarket is expected to open higher on Monday following positive overseas leads. Picture: NCA NewsWire/Bianca De Marchi

The Australian sharemarket is tipped to open higher on Monday following upbeat overseas leads, with easing restrictions in Melbourne adding to positive sentiment.

After notching up its best week in six on the back of a bank rally sparked by the federal government rolling back responsible lending obligations, the local sharemarket is expected to start the week 21 points, or 0.4 per cent higher, building on Friday’s gains.

Investors will take their cues from the strong performance in the US, where shares ended the week higher amid progress on a more-than $US2 trillion ($2.85 trillion) stimulus package that could be voted on this week.

In Friday’s trade, the Dow Jones index gained 1.3 per cent to 27,173.96, the S&P500 rose 1.6 per cent to 3298.46, and the Nasdaq index lifted 2.3 per cent to 10,913.56. Over the week, the Dow slipped 1.7 per cent and the S&P 500 lost 0.6 per cent, while the Nasdaq rose 1.1 per cent.

“What we could see on Monday, with the Nasdaq up firmly 2.3 per cent on Friday, that positive momentum could flow into the IT shares on the ASX 200,” CommSec senior economist Ryan Felsman told The Australian.

“Certainly tomorrow, companies like Appen — the WAAAX companies, as they’re called — they could benefit from the recovery on Friday. So that’s something to look out for.”

In the US, tech giant Apple rose 3.8 per cent on Friday, while Amazon gained 2.5 per cent.

“Then, of course, on a sentiment perspective we have seen the lifting of the curfew in Melbourne, some easing in some of Melbourne’s restrictions, so that also may lead to a bit more positivity and better sentiment as well, especially with consumer confidence,” Mr Felsman said.

Mining stocks are not expected to offer much support at the start of the week, with the iron ore price declining last week and both Rio Tinto and BHP down in London trade on Friday.

Further ahead, ASX Ltd kicks off AGM season on Wednesday, while mining services firm NRW Holdings and property group Cromwell are due to trade ex-dividend in coming days. Dividend payments are expected this week from ANZ, CBA, Coles and Fortescue, with market watchers keenly awaiting to see if investors reinvest or bank the payouts.

Biotech firm Mesoblast will be in the spotlight this week, with the US Food and Drug Administration expected to rule on its cell treatment by Wednesday. There could also be some volatility midweek that may spill over from US markets as US President Donald Trump and rival Joe Biden face off in the first of three debates on Tuesday evening US time.