12 Oct Australian stocks tipped to open flat
Australian stocks are expected to open flat on Monday as Wall street closed the week modestly lower following its horror session on Thursday.
AMP Investments chief economist Shane Oliver said the federal government’s announcement that it would guarantee all money deposits for the next three years would have little impact on Monday’s market.
“Whether it will help the local market is doubtful because our market is hostage to whatever is going on internationally,” Mr Oliver said.
“There isn’t an issue with Australian banks anyway, but it is a positive thing and does provide additional comfort to depositors of Australian banks,” Mr Oliver said.
The move was made as a key step towards safeguarding the nation from the impact of the global financial crisis.
On Friday, The Dow Jones lost 128 points, or 1.49 per cent to 8451.19 while the Standard & Poor’s 500 index fell 10.7 points, or 1.18 per cent, to 899.22.
The tech-heavy Nasdaq managed a slim gain of 4.39 points or 0.27 per cent, to 1,649.51.
Despite the Columbus Day public holiday in the US on Monday, the markets will remain open there.
Commsec chief economist Craig James said the share market was not driven by fundamentals but rather by sentiment at the moment.
“Predicting the share market is like predicting horse racing,” Mr James said.
“The futures market is pointing to a gain of 27 points but it’s still very hard to predict.
“Investors haven’t been given a lot of confidence by the wishy-washy statement coming from the G7, it’s short on specifics,” Mr James said.
“But we do know that the stock market is super cheap, inventors just need to have confidence because buying now will produce good gains over the longer term.”
The Australian share market closed more than eight per cent lower on Friday in a session that wiped $106 billion from the value of stocks.
The benchmark S&P/ASX200 index was down 360.2 points, or 8.34 per cent, at 3,960.7, while the broader All Ordinaries index fell 351.9 points, or 8.2 per cent, to 3,939.4 – its biggest fall since 1987 when it dropped almost 25 per cent.
Interesting financial events on the diary for this week kick off with Monday’s release of the Australian Bureau of Statistics’ lending finance data for August.
Also to be released on the same day is the Australia and New Zealand Banking Group Ltd job ads survey for September.
Then on Tuesday, Fairfax Media Ltd chief executive David Kirk will address the Sydney Institute on The Public Good, Public Companies and the future of Print Media and Quality Journalism.
Telstra business managing director Deena Shiff will also speak on Tuesday at the American Chamber of Commerce in Sydney on Outsmarting a Slowdown – How Australian Business is using new Technology.
The Reserve Bank of Australia (RBA) bulletin for October and Ten Network Holdings annual results come out on Thursday.
News Corporation holds its annual meeting in New York on Friday.