ASX will rise as Wall Street recovers, oil prices rise

Australian stocks are expected to continue their rally from yesterday, as Wall Street recouped losses and oil prices rose as well.

ASX futures were up 0.1% at 7,268 at 6:51 am AEDT.

The Australian dollar was fairly stable at 71.54 cents US.

The Dow Jones Industrial Average rose 1.6% to 35,479, while the S&P 500 gained 1.6% to 4,641.

The Nasdaq Composite added 2% to 15,283.

The gauge of MSCI stocks around the world rose 1.5%.

Oil prices rebounded amid fears that the Omicron’s spread could dampen fuel demand and signs of improving supply.

Brent crude oil rose 3.5% to US $ 74.00 per barrel this morning.

Global stocks fell earlier in the week after Omicron infections spiked around the world, but strong corporate earnings and reports that the Moderna COVID-19 vaccine offers protection against the variant have lifted hope to investors on Tuesday.

U.S. stocks have also been hit after U.S. President Joe Biden’s $ 1.75 trillion ($ 2.44 trillion) spending bill received a potentially fatal blow on Sunday.

“We think it was a bit late for the past two weeks. We’re sort of ready for a rally in time for Santa Claus, which officially begins next Monday,” said Scott Brown, technical market strategist at LPL Financial, explaining that a so-called “Santa’s Gathering” can take place during the last five trading days of the year and the first two of the New Year.

A grim trading session in the United States on Monday highlighted market fears that the rapid rise in cases of the coronavirus variant will again force governments around the world to impose lockdown measures, potentially stifling fragile economic recoveries from similar measures earlier in the year.

Still, investors on Tuesday were cautiously optimistic that the economic blow wouldn’t be so severe this time around, buying stocks and selling currencies seen as safe havens such as the dollar and Japanese yen.

More soon.

ABC / Reuters

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Felix J. Dixon