Iron, gold to lift markets

THE Australian sharemarket is tipped to open in positive territory on Monday despite

weak overseas leads, with iron ore and gold miners among those flagged for gains.

SPI futures are pointing to an 11 point, or 0.2 per cent, lift at the opening, even after markets in the US and Europe ended Friday’s session down.

The Nasdaq led falls as tech stocks took a beating and investors braced for the US Federal Reserve to push forward with tapering plans.

CommSec senior economist Ryan Felsman said it would probably be a choppy session in the local market on Monday.

“We saw market interest rates fall quite sharply in the US, so the 10-year yield was down 9 basis points, to 1.36 per cent,” Mr Felsman said.

“That means the US 10-year is now at the lowest level since about September, suggesting the banks will be under pressure again tomorrow.”

Oil prices ended Friday’s session mixed, with Brent up 0.3 per cent to $US69.88 a barrel and the US Nymex down 0.36 per cent to $US66.26 a barrel.

Mr Felsman said iron ore and gold miners could provide a degree of support.

“The iron ore price has shown tentative signs of stabilising, so it was up by 0.2 per cent, which is also what SPI futures are up by,” he said.

“The iron ore price is now at $US98.20 a tonne and we could see some support for the iron ore producers. That said, we did see Rio Tinto and BHP down up to 3 per cent in London trade, so it’ll definitely be a bit of a choppy one tomorrow.”

Other reasons the local market could find support on Monday are the lower Australian dollar and the smaller tech sector protecting us from the big hits seen in overseas markets, Mr Felsman added.

The Australian dollar is currently trading about $US70c, even dropping just below this, to $US69.95c, in the last trading session.