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Aus market tipped to open lower after US drop

Australian Associated Press

The Australian sharemarket is expected to start the week lower again on Monday, but experts say there’s plenty of room for improvement.

It follows a flat finish to the week for the market after one of the worst trading weeks in almost three years as a result of falls in the United States rippling out to world markets.

Also read: Bitcoin, Ethereum, and Ripple crash lower after expert warns of crypto implosion

Thursday was the share market’s worst session since February, with $50 billion was wiped off as the benchmark ASX200 dipped 2.7 per cent to a five-month low.

The Australian Futures market is predicting the benchmark S&P/ASX200 index will start the week 51 points down following last week’s volatility.

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However Commsec Chief Economist Craig James says the market could quickly turn around again.

“It’s hard to reconcile that (lower start predicted) with everything else that’s going on – we had oil higher, a number of the base metal prices higher,” Mr James said.

“We’ve just got to take that at face value and see how it plays out, but our expectation is there’ll be a few more bumps over the next week as markets adjust to the fact that (US) interest rates are going up.”

Also read: Govt does have economic narrative: Cormann

He said despite the volatility, the strength of the local market would see it likely weather the current storm, although a number of factors could serve to undercut that positivity.

This week will see the release of the Reserve Bank board minutes on Tuesday, after the RBA left interest rates on hold at 1.5 per cent earlier this month.

Thursday will see the release of employment data for September, which could also have an effect on the market.

Internationally, China is expected to release economic growth figures this week, while all eyes will be on the continuing US-China trade stoush.

Also read: Frydenberg weighs in on US-China trade war

The Australian dollar was trading at 71.1 US cents on Sunday, down slightly from its highs of last week when it topped 72 cents.