Investors expect subdued market
THE Australian share market is expected to consolidate this week after recent gains, as investors wait for results from the US earnings season.
CommSec chief economist Craig James says he expects the domestic market to open lower today and trading for the week to be subdued.
On the ASX 24, the December share price index futures contract is indicating the Australian market will open 13 points, or 0.29 per cent, lower.
Mr James said the prediction seemed fairly accurate with weak leads from both the US and European markets from Friday and weaker commodity prices.
‘‘We haven’t got an inspiring lead into the week,’’ he said. ‘‘The US market finished flat or slightly lower and European markets were down and all the commodity prices were down as well, so it does point towards a weaker start.’’
Mr James said the investors would be keeping an eye on results from the US earnings season and any news on whether the Spanish Government would ask the European Central Bank for a bailout.
‘‘The focus over the week is very much on the US earnings season,’’ he said.
Domestically, housing finance, lending finance and new car sales figures will be released during the week, but Mr James said they would be secondary considerations to overseas news.
‘‘They hardly set the world on fire, but they do provide some guidance on how the housing market is tracking and gives some indications about the banking sector and consumer confidence,’’ he said.
Economists will also be closely examining the Reserve Bank of Australia’s minutes from its October meeting for any more detail on why it decided to cut the cash rate by 25 basis points.
‘‘We will want to see if they flesh out the reasons a bit more,’’ Mr James said.
‘‘There seemed to be some concern about the global economy and you also want to know how much of a role the higher Australian dollar played.’’