The Australian sharemarket is expected to open slightly higher today, after some mixed performances on Wall Street and strength in the European markets overnight.
Gains in gold and base metals, alongside a healthier Australian dollar, are likely to provide additional support for local stocks.
Key data expected to inform the mood include Chinese GDP growth, retail sales, fixed asset investment and industrial production figures.
A muted Wall Street
Wall Street was muted on Thursday as investors assessed fresh economic data and corporate earnings.
The Dow Jones slipped 68 points (-0.2%), the S&P 500 fell 0.2%, and the Nasdaq lost 173 points (-0.9%), with Apple (NASDAQ:AAPL) sliding 4.0% and UnitedHealth (NYSE:UNH) falling 6.0% after missing revenue expectations.
Taiwan Semiconductor Manufacturing Company (+3.9%) posted a record quarterly profit, while Morgan Stanley (NYSE:MS) rose 4.0% on strong dealmaking revenues.
In contrast, US Bancorp (NYSE:USB) dropped 5.6% after reporting mixed fourth-quarter results, and Bank of America (NYSE:BAC) eased 1.0% despite projecting higher interest income for 2025.
European markets rally
European markets rose strongly, driven by gains in luxury and technology stocks.
The FTSEurofirst 300 index climbed 1.0%, and the UK FTSE 100 added 1.1%. Richemont (SIX:CFR) surged 16.4% after beating quarterly sales expectations, boosting other luxury names like LVMH (+9.2%) and Dior (+8.6%).
Technology shares gained 2.1%, buoyed by TSMC’s record results.
US bond yields declined as Federal Reserve Governor Christopher Waller suggested the possibility of rate cuts later this year if economic data weakens further. The 10-year Treasury yield fell 4 basis points to 4.61%.
Currencies and commodities
Currencies were stronger against the greenback overnight. The Australian dollar strengthened overnight, trading near 62.10 US cents at the US close.
The Euro was up from US$1.0260 to US$1.0314 and was near US$1.0300 at the US close.
The Japanese yen strengthened from 156.30 yen per US dollar to JPY155.11 and was near JPY155.20 at the US close.
The gold futures price rose US$33.10 (+1.2%) to US$2,750.90 an ounce, supported by declining U.S. Treasury yields and a weaker U.S. dollar. Spot gold was near US$2,714 at the U.S. close.
Iron ore futures added US29 cents (+0.3%) to US$100.49 a tonne. Rio Tinto (ASX:RIO) reported its lowest annual shipments in two years, citing heavy rains in Western Australia during the December quarter.
Global oil prices eased on reduced Red Sea tensions as Yemen's Houthi militia indicated it would halt ship attacks. Brent crude fell 0.9% to US$81.29 a barrel, and WTI lost 1.7% to US$78.68 a barrel.
On the base metals front, copper rose 1.2% to a five-week high, and aluminum gained 1.8%, supported by paused U.S. dollar strength and proposed European sanctions on Russian exports.