Bank inquiry report to impact Aust trade


Australia’s share market is tipped to open positively but the release of the financial services royal commission report is likely to impact trade throughout the week.

The positive start has been attributed to favourable company earnings and employment in the United States as well as a rise in oil prices in Australia, CommSec chief economist Craig James told AAP on Sunday.

“A lot of support from our market is coming from the resource sector,” Mr James said.

“Gains of 10 to 15 points are possible at the start of trade with a lot of support coming through from the resource sector.”

The Dow Jones was up 64.2 points on Friday and the S&P/ASX200 index ended the week down 1.9 points, or 0.03 per cent.

The Australian dollar is sitting stable at 72.5 cents.

Mr James said there were no major issues in the global economy but a big event for the Australian share market would be the release of the banking royal commission findings after the markets close on Monday.

Over the past year, Commissioner Kenneth Hayne has heard explosive evidence that has embarrassed and shamed the financial sector.

ASX200 financial stocks fell in nine of the 14 months since then Treasurer Scott Morrison caved to overwhelming public and political pressure by announcing the royal commission.

Mr Hayne’s report is expected to contain recommendations that will have a recognisable impact on the banking and financial sector, including lending practices.

“There will be a fair bit of caution from investors before the statement comes out … it will influence trade over Tuesday and the remainder of the week,” Mr James said.

The Australian Reserve Bank will hold a board meeting this week but isn’t expected to make any interest changes with investors also watching out for US President Donald Trump’s State of the Union address.

Globally, the US and China trade battle remains an unresolved situation for investors.



Source link Finance News Australia

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