Energy sector set to jumpstart week for ASX 200

The Australian sharemarket is tipped to start on a positive note on Monday following solid overseas leads, with the energy sector expected to jump on oil price gains.

The Australian sharemarket is tipped to open higher on Monday. Picture: NCA Newswire/Gaye Gerard

The Australian sharemarket is tipped to start on a positive note on Monday following solid overseas leads, with the energy sector expected to jump on oil price gains.

SPI futures are pointing to a 0.3 per cent rise at the open after US and European markets finished Friday’s trading well in the green on the back of a better-than-expected US jobs report.

The US job market staged a strong comeback in October, with the world’s largest economy adding 531,000 jobs in the month, pushing the unemployment rate down to 4.6 per cent.

US sharemarkets rose on the news, with the Dow Jones Industrial Average finishing 0.6 per cent higher, the S&P 500 climbing 0.4 per cent and the NASDAQ up 0.2 per cent.

Energy and gold stocks are likely to fare well at the start of trade on Monday, CommSec chief economist Craig James said.

“The US keeps requesting more oil to be put on the market, but OPEC+ is still worried about outbreaks of Delta around the world and the potential for fresh lockdowns, so they’re not going to boost supply,” Mr James said.

The supply/demand mismatch has kept oil prices hovering around the $US80 mark for a number of weeks, with WTI up 3.1 per cent on Friday to $US81.27 a barrel and Brent up 2.7 per cent to $US82.74.

Meanwhile, the gold price jumped 1.3 per cent at the end of last week to $US1816.80 as markets bet a patient US Federal Reserve will move slowly with its tapering.

Iron ore miners could come under a degree of pressure after the iron ore price slumped 7 per cent to $US92.75 a tonne.

But even at this lower pricing, iron ore producers are still making quite a bit of profit, Mr James said.

“The expectation was always that iron ore would retreat to more sustainable levels, but even at $US92 a tonne, with the cost of production sitting at $US15 or $US20 a tonne, there’s still a lot of gains there for iron ore producers.”

On the data front, NAB’s business survey is out on Tuesday, following by consumer confidence on Wednesday and labour force data on Thursday.

CBA expects the employment data to show 50,000 jobs added in October but for the unemployment rate to lift from 4.6 per cent to 4.7 per cent as the participation rate climbs from 64.5 per cent to 64.8 per cent.

On Sunday China reported that its exports rose by a better-than-expected clip in October.

Official data showed that demand strengthened in some key markets such as the United States and Covid numbers easing overseas.

Exports rose a better-than-expected 27.1 per cent year-on-year in October, according to customs authorities, to $300.2bn.

Imports came in slightly below analyst estimates, rising 20.6 per cent in October.