A solid close to the week on the US bourse is likely to flow on to Australian stocks when the market opens this week, with early gains of 1.5 per cent expected.
The S&P/ASX200 benchmark index finished Friday up 25.5 points, or 0.49 per cent, at 5,242.6 points, but over the week dropped 244.9 points, or 4.46 per cent.
This snapped a four-week string of gains on the Australian stock market.
CommSec chief economist Craig James on Sunday said the Australian futures market pointed to an 82-point rise on the ASX, or 1.5 per cent, in Monday’s early trade.
Mr James said the resource sector would benefit from the steady recovery of oil prices amid global production cuts prompted by a collapse in demand due to the COVID-19 pandemic, as well as a 1.1 per cent lift on the US’ Dow Jones on Friday.
“We have had a good track record since we hit the lows,” Mr James told AAP.
Energy companies on Friday were the big winners, up 2.0 per cent as the price of Brent crude advanced four per cent. It now sits at $US21.44 a barrel.
Woodside gained 1.8 per cent, Santos rose 1.9 per cent and Oil Search advanced 4.8 per cent, while miners BHP, Rio Tinto and Fortescue Metals lifted.
Melbourne biotech company Mesoblast also soared 38.9 per cent to $2.73 after reporting that of a dozen COVID-19 patients on ventilators treated with its stem cell product candidate remestemcel-L, 10 had survived and nine had come off the ventilators.
Mr James said Australian analysts would this week keep a close eye on inflation figures released on Wednesday, with a headline increase to the Consumer Price Index of 0.1 per cent and underlying increase of 0.4 per cent expected.
Those figures would mostly reflect a pre-coronavirus economic environment.
“It’s the March quarter figures coming out – it’ll really be dominated by lower petrol prices so that’ll keep the headline rate of inflation contained,” Mr James said.
“But that’s not a big focus at the moment here in Australia, it’s all about growth … what happens to economic growth, jobs numbers and home prices.”
International trade prices would also be released on Thursday.