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ASX 200 to start higher, tech and commodity prices drive optimism

EditorOliver Gray
Published 27/05/2024, 09:59 am
© Reuters.

Investing.com - The Australian stock market is expected to open stronger after a dip on Friday, riding on the back of strong performances from tech stocks in the United States and softening concerns around global interest rates.

ASX 200 Futures are signaling an increase of 0.1%, suggesting a rebound from Friday's 1.1% drop. This decline was triggered by robust US services and manufacturing PMI data from last week, which demonstrated the fastest growth in business activity in over two years as of May, reigniting fears that the US Federal Reserve may need to sustain higher rates for an extended period.

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However, these worries were somewhat allayed during US trading on Friday after a survey from the University of Michigan showed that consumers are now expecting a 3.3% annual inflation rate over the coming year, down from the 3.5% forecast earlier in May. This led to a recovery in the Dow Jones Industrial Average, S&P 500, and NASDAQ Composite, offsetting earlier losses from the week.

US markets will remain closed on Monday due to Memorial Day.

Attention is expected to be focused on the ASX tech sector on Monday, as a continuing rally in US tech stocks late last week.

The local benchmark is also predicted to benefit from a rise in commodity prices over the weekend. Iron ore futures saw a moderate increase of 0.8%, reaching over $US120.40 a tonne, while Brent crude rose by 1% to $US82.16 a barrel, although it's still hovering near three-month lows.

Earnings are due to be released by Mesoblast Ltd (ASX:MSB) and SmartPay Holdings Ltd (ASX:SMP), while Dicker Data Ltd (ASX:DDR) is preparing to host its AGM. Kelly Partners Group Holdings Ltd (ASX:KPG), meanwhile, is trading ex-dividend.

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