Investors appear set to push the ASX slightly higher in early trade before the release of GDP figures which could all but confirm Australia’s first recession in almost 30 years.
The SPI 200 futures contract was higher by 31 points, or 0.53 per cent, to 5,861.0 at 0700 AEST on Wednesday, indicating a slight gain early.
A late-session rally has pushed Wall Street to solid gains as traders looked past race riots and pandemic worries to focus instead on easing lockdown restrictions and signs of economic recovery.
Tech shares, along with cyclical stocks like industrials and financials, gave the biggest lift to all three major stock indexes.
Most of the attention in Australia will be on economic growth figures for the March quarter, following the devastating impact of the coronavirus pandemic.
Economists predict the Australian Bureau of Statistics’ estimate of gross domestic product (GDP) will be a loss of between 0.1 per cent and 0.5 per cent.
A negative figure will almost certainly mean a recession, given the much deeper impact expected in the June quarter from travel bans and social distancing.
A technical recession is defined as two quarters of declining economic activity. There was plenty of preliminary data on Tuesday for investors to consider and the benchmark S&P/ASX200 index closed up 15.9 points, or 0.27 per cent, at 5,835.1 points. The All Ordinaries also closed up 21.7 points, or 0.37 per cent, at 5,960.1 points. The Australian dollar continues to gain momentum from iron ore prices. Concerns about supply from Brazil, which is struggling to stop the spread of COVID-19, has meant more demand for producers in Australia.
One Australian dollar was buying 68.97 US cents at 0700 AEST, up from 68.02 US cents at the close of trade on Tuesday.