Market tipped to fall amid US uncertainty

THE Australian share market is likely to start the trading week lower but probably won’t suffer the same declines as US markets.

The US outlook has been clouded by its ongoing trade war with China, and the Aussie market has, in turn, suffered some collateral damage.

The futures market predicts the benchmark S&P/ASX200 will fall 0.5 per cent, or 30 points, when Australian trade resumes today.

It follows a number of uncertainties in the US, including evaluations of the share market, the US Federal Reserve interest rate policy and the trade stoush with China.

The Dow Jones Industrial Average fell almost 560 points or 2.2 per cent and the NASDAQ was down 3.1 per cent on Friday, providing Australia with its negative lead into the market.

But it’s not all bad news, according to CommSec chief economist Craig James, with the Australian market outperforming overall in its past few sessions.

“Really the issues that the US is responding to are more US-centric issues, rather than affecting Australia,” he said yesterday.

Mr James said the current high oil price would help Australia’s energy sector.

“The OPEC oil ministers in Russia have agreed to a cutback in terms of production, so that did see oil prices rise 2-3 per cent on Friday, which will help our energy sector,” he said.

The gold price was higher — at $9 an ounce — as were base metal prices, leaving the mining and energy sectors in good shape and pushing up the price of Australia’s major export iron ore, Mr James said.

Domestically, in the week ahead investors will be looking to speeches from Reserve Bank officials as well as expected data on business and consumer confidence.

But Mr James said the focus would continue to remain overseas, with both the US and China showing clear activity indicators such as retail spending and industrial production, while also exhibiting inflation indicators that were expected to be reflected in the markets today.

The Australian dollar edged slightly higher and was buying US72.29c late on Friday, up from US72.27c on Thursday.