The ASX will be looking for another positive start today after Wall Street’s solid performance on Friday and a 50 point plus rise in the ASX 200 futures index.
Eurozone shares rose 0.3%, the US S&P 500 added 1.4% which took it to a new record high as the rotation to cyclicals and value stocks continued.
Reflecting the positive global lead ASX 200 futures rose 51 points, or 0.8%, pointing to a positive start to trade for the Australian share market on Monday.
Australia shares had a 3% plus rise for a second week in a row last week with a gain of 3.5% (3.8% the week before).
The good news about COVID-19 vaccines, higher oil prices, Telstra’s revamp and the impact of rotation on industrial, financial and property stocks, drove last week’s gains, along with a clearer picture from the US Presidential election.
While gold prices fell, oil, metal and iron ore prices rose. The $A rose slightly to 72.70 US cents despite a rise in the greenback.
AMP Chief Economist Dr Shane Oliver says major global share markets and Australian shares have broken higher over the last two weeks – potentially opening the way for more upside.
“US shares rose to a new record high, Eurozone shares have broken above the range they have been in since June, Japanese shares have broken well above pre-coronavirus levels to their highest since the early 1990s and Australian shares have broken out of the consolidation they have been in since June.
“US election uncertainty and coronavirus lockdowns could upset this in the very short term but it’s all consistent with ultra-easy monetary policy, massive fiscal stimulus and the recovery in economies and profits getting a boost next year as vaccines are deployed against the background of normal seasonal strength that kicks in over the next few months.
“We continue to see more upside for the Australian share market over the next 6 to 12 months.,” Dr Oliver wrote in his week-end note.
