The Australian share market is set to start the trading week lower, reversing Friday’s gains after a weak session on Wall Street.
The market is likely to stay flat in the week ahead after plunging oil prices caused US stocks to suffer their biggest Thanksgiving-week loss since 2011.
The futures market predicts that the benchmark S&P/ASX200 will fall 0.6 per cent, or 37 points, lower when Australian trade resumes on Monday.
It follows broadbased selling on US markets with big losses across the tech and resources sector.
The Dow Jones Industrial Average fell 179 points, or 0.73 per cent, to 24,285.95 while the S&P 500 index lost 17.4 points, or 0.66 per cent, to end the shorter holiday session at 2632.56.
AMP Capital’s chief economic Shane Oliver said the overnight losses on Wall Street would wipe last week’s gains off local markets.
Energy and commodities stocks will remain volatile after West Texas Intermediate crude hit $50 a barrel overnight, a 34 per cent price drop since October, Dr Oliver told AAP.
‘But we have seen a pattern of the market crawling back a lot of losses over the day which could turn out to be OK,’ he said.
On the political front, there will be little impact from Labor’s landslide re-election in Victoria.
‘I assume it will just add to the overall nervousness of the upcoming federal election,’ Dr Oliver said.
Investors will be more interested in watching the G20 summit on Friday amid crucial talks on trade tariffs between the US and China.
US tariffs are set to rise another 25 per cent on January 1.
‘The best that can be hoped is President Trump will agree to put tariff hikes on hold,’ Dr Oliver said.
On local markets, Reserve Bank governor Philip Lowe will be watched for clues about tightening credit conditions on Monday, as he gives a speech at the Australian Payment Summit in Sydney.
It comes as the Banking Royal Commission winds up on Friday following months of damning revelations about the conduct of the financial sector.
The benchmark S&P/ASX200 index was up 24.9 points, or 0.44 per cent, at 5716.2 at 1615 AEDT on Friday, while the broader All Ordinaries rose 0.40 per cent.
The Australian dollar was buying 72.49 US cents on Friday at 1630 AEDT.