Local sharemarket poised to open higher as China boost eyed

Resources stocks are on track to open sharply higher amid hopes for a moderation in China’s economically damaging lockdown policies.

Ahead this week, the market will watch Westpac’s November consumer confidence index and NAB’s business confidence survey for October, both due on Tuesday. Picture: NCA Newswire/Gaye Gerard

The local sharemarket is on track to lift sharply at the open on Monday, with miners set to rally, amid hopes for a moderation in China’s strict lockdown policies.

At the close of US trade, S&P/ASX 200 futures were pointing to a rise of 1.3 per cent, to 6976 points.

Wall Street and oil prices surged on Friday night on rising expectations China would roll back some of its economically-painful policies surrounding Covid.

Brent crude jumped 4.1 per cent and West Texas Intermediate bounced 5 per cent as traders eyed rising demand for crude on the news out of China.

Iron ore surged 4.1 per cent, while the Australian dollar jumped 2.9 per cent to US64c.

“Asia markets bounced back strongly on more unsubstantiated reports that the Chinese government is looking at a reopening strategy as it looks to navigate a path out of the straitjacket of its current zero-Covid policy,” CMC Markets analyst Michael Hewson said.

“These reports, which still haven’t been confirmed in any official capacity, have prompted a huge relief rally in equity markets, despite concerns that any reopening is unlikely to happen in the immediate future, and the very real risk that it is merely a sucker’s rally,” he added.

Global equities also got a boost from the latest US jobs data, which showed that hiring remained resilient and wages continued to rise, though at a slower pace, raising hopes of a soft landing of the economy despite rising interest rates aimed at quelling inflation.

On Wall Street, the benchmark S&P 500 index rose 1.4 per cent to 3,770.55 points after a volatile session. The broader Dow Jones Industrial Average rose 1.3 per cent to 32,403.22 and the technology-heavy Nasdaq put on 1.3 per cent to 10,475.25.

Ahead this week, the market will watch Westpac’s November consumer confidence index and NAB’s business confidence survey for October, both due on Tuesday.

In the US, consumer price inflation numbers for October will be released on Friday night.

Additional reporting: AFP