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Saturday 15

December, 201811:40 AM



Aussie shares to open lower after US slump

Aussie shares to open lower after US slump

The Australian markets are tipped to open weaker on Monday after a slump in Europe and Wall Street.

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By AAP 07.10.2018 11:26 AM

The Australian markets are expected to get off to a weak start this week, after shares took a hit in Europe and on Wall Street on Friday.

The Australian share price futures contract ended the week down 28 points, or 0.45 per cent, at 6146.0, pointing to a lower open for the ASX on Monday.

US stocks dropped for a second straight day on Friday following a rise in Treasury yields amid strong jobs growth.

The decline was led by the large tech and communication services stocks such as Facebook, Amazon, Apple and Netflix.

The Dow Jones Industrial Average fell 180.43 points, or 0.68 per cent, to 26,447.05, the S&P 500 lost 16.04 points, or 0.55 per cent, to 2,885.57 and the Nasdaq Composite dropped 91.06 points, or 1.16 per cent, to 7,788.45.

For the week, the S&P fell 0.98 per cent, the Dow slipped 0.04 per cent and the Nasdaq dropped 3.2 per cent. It was the biggest weekly decline for the Nasdaq since March.

Australian shares may also lose some ground on Tuesday when NAB releases its monthly business confidence survey for September.

AMP Capital's chief economist Shane Oliver believes it is unlikely to bounce back from a dip in August on the back of political chaos in Canberra.

"It might show a bit of a rise, but I suspect it is going to remain down on recent months because political turmoil got everyone thinking about the next election," Dr Oliver said.

"Suddenly everyone is talking about the potential for tax change under Labor and what impact that might have on the economy."

Potential changes to negative gearing and capital gains tax changes could add to the drag in consumer confidence, amid concerns of falling house prices in Sydney and Melbourne, he added.

The Australian dollar is delivering welcome news to local businesses, pushing down further towards 70 US cent, after being at 70.46 US cents, when Wall Street finished trade for the week.

US inflation figures and Chinese economic data could also impact the Australian market towards the end of the week, and CommSec senior economist Ryan Felsman predicts the resources sector is likely to be lower after declines in Rio Tinto and BHP on the London exchange.

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