Australian stock market set for ‘volatile’ start

AUSTRALIAN stocks are set for a volatile start to the week following US and European falls over concerns about the Turkish currency.

“We’ve already seen a bit of a reaction on our market, perhaps in anticipation of what we saw in Europe and the US, and that probably explains why our futures market was actually able to rise slightly,” AMP Capital’s chief economist Shane Oliver said.

The benchmark S&P/ASX200 index on Friday closed down 19.3 points, or 0.31 per cent, at 6278.4 points, and the All Ordinaries index down 16.8 points, or 0.26 per cent, at 6366.8 points.

The SPI200 Futures Index was down 20 points, or 0.32 per cent, to 6219 points.

“We’ll probably have a bit of a gain at the start, maybe 10 points, but I think those worries about Turkey and flow-on to European banks and other emerging markets will probably linger,’ Dr Oliver added. The Turkish Iira hit an alltime low on Friday following an ongoing diplomatic stand-off with the US over the detention of American pastor Andrew Brunson on terror-related charges.

Amid the stoush, US President Donald Trump has doubled tariffs on Turkish steel and aluminium imports.

In response to the volatility, the Australian dollar took a hit on Friday night and dropped to levels last seen in early 2017, at one point dipping below 73 US cents.

Local stocks are in for a “fairly volatile day” on Monday, Dr Oliver said.

Financial results are this week expected from companies including Bendigo Bank, BlueScope, JB Hi-Fi, Telstra and IAG.

The National Australia Bank’s business survey tomorrow is expected to reveal confidence remaining fairly solid, Dr Oliver said.

“Consumer confidence may be of more interest on Wednesday, though. It had a good bounce in July … the focus will be on whether a recovery in consumer confidence continues.”

He added quarterly wages data would probably show growth staying around 2.1 per cent on an annual basis.

Meanwhile, a gain of around 10,000 jobs and an unemployment rate remaining at 5.4 per cent was expected to emerge from Thursday’s employment figures.