China’s unexpected rate cut is expected to be good news for Australian stocks. The one-year lending rate was slashed by the People’s Bank of China on Friday by 40 basis points, to 5.6 per cent. The one-year deposit rate also came in for a trim at 25 basis points, 2.75 per cent.

The US central banks pushed American stocks to new heights. The flow-on effect allowing European stocks to surge.

Commodity traders also noticed gains in their prices.

This means when the sotck market opens today it will be ready for launch.

Craig James, chief economist from CommSec, said, “All roads lead north. If we can’t get an increase in our share market on Monday, I don’t know when we can get one.

“The futures market is pointing to a gain of 52 points, or one per cent.

“If we can record that sort of gain, we’ll be well on the way to wiping out the losses from the previous week.”

The losses being referred to were the worst week for the Australian share market in 18 months; something that had economists and the Reserve bank concerned. Australian stocks had 2.75 per cent wiped off their value last week. Stocks across the board were brought down by the weakening resources sector.

The Australian Bureau of Statistics this week released key domestic data likely to to impact on currency rather than stocks. The Australian market is likely to follow the upswing of the US market early in the week, until it closes for Thanksgiving.

“If we do have an improvement in investment expectations,” said Mr. James, “then the Aussie dollar will certainly key off that.

The incipient listing of Medibank Private will also impact on the markets:

“A number of people have been trying to lighten the load of other shares to be able to take on Medibank.

“Once that float’s out of the road, then we can get down to effectively normal business in Australia.”

About The Author

Someone you can depend on to respect you and care for your dog. Let me help you give your dog the life it deserves.

Leave a Reply

Your email address will not be published.