Australia’s sharemarket is poised for a flat start to trade, although investors may be encouraged by their US counterparts’ belief in economic recovery, and downplaying the race riots.
The SPI 200 futures contract was higher by 9 points, or 0.15 per cent, to 5,837.0 at 0700 AEST on Tuesday, indicating a flat start.
The Dow Jones, Nasdaq and S&P 500 in the US all finished higher by less than 1.0 per cent overnight after a strong May rally.
The White House called for “law and order” after six nights of widespread, violent demonstrations triggered by the death of civilian George Floyd at the hands of police, even as the country reels from the economic effects of coronavirus pandemic-related lockdowns.
Kingsview Asset Management portfolio manager Paul Nolte said: “Most investors are saying (the protests) aren’t going to destroy the economy. It’s a roadblock but it’s not as big as a pandemic”.
Meanwhile in Australia, the Reserve Bank board will meet to consider the cash rate, although economists do not expect change to the official rate.
The benchmark S&P/ASX200 index closed Monday up 63.5 points, or 1.1 per cent, at 5,819.2 points.
The All Ordinaries closed up 66.2 points, or 1.13 per cent, at 5,938.4 points.
The Aussie has surged this week following a rise in iron ore prices and the release of better-than-expected Chinese manufacturing data.
One Australian dollar was buying 67.98 US cents at 0700 AEST, up from 67.46 US cents at the close of trade on Monday.