Market to be ‘at ease’ with Labor’s triumph

THE sharemarket will take Labor’s election win in its stride, but will be sensitive in the coming months to any signs of loose fiscal policy that could spur higher inflation and force rates upward, market watchers say.

With Anthony Albanese claiming victory, economists and fund managers predict an overall muted reaction on the Australian Securities Exchange on Monday, with some tipping a potential boost for the energy sector, including in renewables, after the opposition went to the election promising stronger action on climate change.

Others warned the incoming Labor government would need to resist the temptation to flash the cash to cushion the impact of higher household costs, with this path only likely to fan the inflationary flames.

While SPI futures are pointing to a slight decline at the open of 0.2 per cent, the sharemarket could get a mild boost from a more certain election outcome than many were expecting, CommSec chief economist Craig James said.

“When you get a clearer election result after the poll day then markets tend to respond positively,” he said.