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Wednesday 19

December, 2018 8:26 AM



Aussie market to feel US tech drag

Aussie market to feel US tech drag

The local share market is expected to open slightly lower on Monday on the back of a slide in tech stocks in the US, but sentiment is likely to bounce back.

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By AAP 29.07.2018 11:17 AM

The Australian share market is expected to start the week slightly lower after technology stocks dragged Wall Street into the red.

AMP Capital's chief economist Shane Oliver expects the local share market to open about 25 points down on Monday.

"We can blame Facebook. The US market was down on Friday and it was mainly worries about tech stocks dragging it down," he told AAP on Sunday.

"You might see this initial fall and then a bit of a grind higher as the day proceeds."

The recovery is likely given the small size of the Australian technology sector, Dr Oliver added.

On Friday, Twitter shares plunged more than 20 per cent on the US market over a decline in monthly active users, while Facebook shares dived 19 per cent the previous day after the social media giant forecast years of lower profit margins.

"There's a danger reading too much into it because the broader situation in the US is quite strong," Dr Oliver said.

"It's just the tech sector has been a leading sector in the market for quite a while now, that's why investors are a little bit worried about it."

The local reporting season begins this week, with results from Vodafone Australia on Tuesday, before investors look to Rio Tinto on Wednesday.

The benchmark S&P/ASX200 index closed 55.7 points, or 0.89 per cent higher, at 6,300.2 points on Friday, while the broader All Ordinaries rose 53.9 points, or 0.85 per cent, to 6,391.5 points.

Last week, the benchmark index gained 14 points and had lifted 1.7 per cent so far during July.

The share market is on track to record four consecutive months of gains, the longest run since 2013.

Economic data to be released this week include CoreLogic capital city house prices for the week, ABS building approvals for June and ABS retail trade for June.

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