Australian shares are poised to make a strong start to the week’s trading after notching up their third consecutive weekly gain last week as the 2023 rebound continues.
Higher commodity prices, especially for iron ore, gold and copper helped power last week’s rise as the China re-opening story continued to hold sway, along with the growing hope that inflation has peaked and will soon start falling.
The ASX 200 is looking to rise by more than 30 points today after the Share Price Index ended the week with a 34-point gain on Friday night.
The ASX 200 index had closed 0.2% higher on Friday after rising 0.6% on Thursday.
That saw it rise it rise 1.7% last week, extending its year-to-date gain to about 5.9%, thanks to the demand for resources stocks on the China story.
Gold stocks rose 2.2% on Friday and posted their third straight weekly gain. Sector leaders Newcrest Mining and Northern Star Resources firmed 2.4% and 2.3%, respectively.
Energy stocks followed closely with a rise of 1.4%, with Woodside Energy and Santos adding 0.7% and 1.5%, respectively.
Rio Tinto, BHP Group and Fortescue Metals climbed between 0.1% and 1%.
Whitehaven Coal emerged as one of the top gainers on the benchmark with a 6.1% jump, after the company said it expected profit for the first half of fiscal 2023 to more than quadruple due to strong pricing.
That was despite weak trade, inflation and growth data for December and 2022.
The ASX 200 index is now just 2.3% below its all-time high, who would have thought that would happen after the plethora of doom and gloom forecasts for 2023 late last year and earlier this month.
There’s a big test midweek with the Consumer Price Index for the December quarter due out on Wednesday – that will influence what the Reserve Bank does at its first meeting for the year on February 7.
Thursday is a holiday here for Australia Day.
The ASX’s gains will come after Wall Street also ended up on Friday, led by a rebounding Nasdaq.
Friday saw the Dow add 330.93 points, or 1%, to close at 33,375.49, while the S&P 500 advanced 1.89% to 3,972.61. Both ended a three-day losing streak.
The Nasdaq frothed higher on Friday, jumping 2.66%, with help from Netflix and Alphabet, to end the day and week at 11,140.43.
Netflix ended up about 8.5% after boosting subscriber numbers by more than expected in the December quarter and Alphabet rose more than 5% after the company announced it will lay off 12,000 employees.
Microsoft added to the tech jobs bloodbath on Wednesday, saying it would cut 10,000 jobs (it reports its earnings tomorrow) while Amazon started telling employees of its own 18,000-person job cuts.
The Nasdaq was also the outperformer for the week, posting a 0.55% gain and its third positive week in a row. The Dow finished the week lower by 2.70%, and the S&P posted a 0.66% loss, both breaking two-week win streaks.
All of the major averages are still in positive territory for the year.
Eurozone shares down 0.5%. Japanese shares rose 1.7% though and Chinese shares jumped 2.6% ahead of the week long Lunar New Year break.
Bond yields were little changed in the US and Europe but fell further in Japan and Australia. Oil and metal prices rose but iron ore prices eased slightly.
The $A rose slightly, briefly rising above $US0.70, with the $US down slightly. The Aussie ended the week around 69.70 US cents.
