Resource stocks face bumpy ride at opening

THE Australian sharemarket is tipped for a flat start on Monday following mixed overseas leads, with energy and iron ore mining stocks likely to come under pressure.

SPI futures over the weekend were pointing to a 0.03 per cent decline at the open for the Australian market.

In the US, the Dow Jones Industrial Average index rose 0.5 per cent overnight on Friday, while the FTSE 100 in London fell 0.5 per cent.

CommSec chief economist Craig James said a drop in oil and iron ore prices was likely to hit resource stocks.

“On energy, the concern is that President (Joe) Biden may come out with some measures to try to drive down petrol prices (potentially by) tapping into the strategic petroleum reserve,” Mr James said.

“So that will be the focus in the energy markets and may drive some downward pressure on energy shares.”

WTI crude dropped 1 per cent overnight on Friday to $US80.79 a barrel amid demand concerns, a rising US dollar and prospect of US rate rises to rein in inflation. Iron ore fell 4.7 per cent, to $US89.75 a tonne amid ongoing demand concerns, particularly from China.

Both BHP and Rio Tinto finished in the red in London trading, with the Big Australian losing 0.7 per cent and Rio ending 0.8 per cent lower.

On the data front for the coming week, all eyes will be on the quarterly wages print on Wednesday, with market watchers expecting a lift in wages growth over the third quarter.

Economists at NAB see a 0.6 per cent lift quarter on quarter, bringing the year-onyear rate to 2.2 per cent.

Overseas, China will release a raft of data on Monday, including retail sales, production and house price index numbers. In the US, the market will closely watch retail sales data out on Monday.