Investors appear set to suffer losses at the start of the trading week in Australia as one economist wondered whether the market could consolidate after a string of gains.
The SPI 200 futures contract was lower by 24 points, or 0.42 per cent, to 5,725.0 at 0700 AEST on Monday, indicating losses in early trade.
The easing of coronavirus restrictions and economic revival has buoyed investors of late.
Tension between the US and China over the latter’s national security legislation on Hong Kong have been the main blight on optimism.
US President Donald Trump last week ended his country’s special trade relationship with Hong Kong in response.
CommSec chief economist Craig James said investors had been “proceeding with caution” after good gains on the share market, nine out of the past ten weeks.
“We’ve had good gains in April and May, it’s been a bit of a winning streak,” he told AAP on Sunday.
“It may be the case investors have gotten a little ahead of themselves and that could see a degree of consolidation come into the market.”
Coronavirus restrictions are easing further in states across the nation today.
Restaurants, pubs and clubs are allowed more customers at their venues in New South Wales, Queensland, South Australia and Victoria, and intra-state travel is allowed.
The main economic events scheduled for this week include the release of GDP figures for the March quarter on Wednesday.
The big question will be whether Australia can avoid a technical recession by recording a small increase.
The Reserve Bank of Australia meets on Tuesday to consider the cash rate, although economists do not expect change to the official rate.
One Australian dollar was buying 66.59 US cents at 0700 AEST, up from 66.55 US cents at the close of trade on Friday.