The Australian share market is expected to start the week higher, buoyed by a strong lead from Wall Street and a win for the Liberal Party’s John Alexander in the crucial Bennelong by-election.
AMP Capital chief economist Shane Oliver says the benchmark S&P/ASX200 is likely to gain at least 25 points when trade resumes on Monday, after the three major indexes in the US climbed to record highs on Friday.
That came after a long-awaited bill to cut corporate tax rates in the US looked like it would win enough support to pass.
The Dow Jones Industrial Average rose 143.08 points, or 0.58 per cent, to 24,651.74, the S&P 500 gained 23.8 points, or 0.90 per cent, to 2,675.81 and the Nasdaq Composite added 80.06 points, or 1.17 per cent, to 6,936.58.
Investors will be watching as the US House of Representatives and the Senate vote on their finalised combined tax reform bill on Tuesday and Wednesday.
Dr Oliver said Liberal John Alexander’s win in the Bennelong by-election in Sydney on Saturday could also provide a small boost to the Aussie market on Monday.
‘The threat hanging over the government seems to have dissipated for now,’ he told AAP.
In other local news, the federal treasurer is expected to release the mid-year economic and fiscal outlook early this week.
Dr Oliver said he doesn’t think the government will change growth forecasts much but could improve its budget projections – including revising down the budget deficit.
The Reserve Bank of Australia will also release minutes from its board’s monetary policy meeting for December and the Australian Bureau of Statistics will release figures on new car sales in November on Tuesday.
The Australian share market closed lower on Friday, with the benchmark S&P/ASX200 stock index down 14.3 points, or 0.24 per cent, at 5,997 points.
The local currency was trading at 76.72 US cents.