ASX set to open above 8600 points amid bets on easing trade tensions
The Australian sharemarket is set to jump over the 8600 point mark, entering new heights after investors monitoring trade discussions between the US and China drove stocks higher on Wall Street amid bets on easing tensions between the world's two economic superpowers.
ASX futures were up 32 points, or 0.4 per cent, at 8628 as of 6.02am AEST. The projected gains would come after the bourse hit an all-time high on Tuesday, buoyed by hopes for the high-level talks in London as officials had struck a positive tone after the first day of negotiations.
The Australian dollar edged up 0.1 per cent to 65.25 US cents as of 6.12am AEST.
On Wall Street, the S&P 500 was 0.5 per cent higher in late trading as the talks between the world's two largest economies carried into a second day. The Dow Jones Industrial Average was up 91 points, or 0.2 per cent, with an hour remaining in trading, and the Nasdaq composite was 0.6 per cent higher.
Stocks have roared higher since dropping roughly 20 per cent below their record two months ago, when President Donald Trump shocked financial markets with his announcement of stiff, wide-ranging tariffs. Much of the rally was due to hopes that Trump would lower his tariffs after reaching trade deals with countries around the world, and the S&P 500 is back within 1.8 per cent of its all-time high, which was set in February.
It's getting to be time to see whether the hopes were warranted. The talks with China, which are likely covering a range of disagreements between the two countries, were 'going well,' US Commerce Secretary Howard Lutnick said on Tuesday, adding he hoped they would end in the evening UK time — but that they could stretch into a third day if necessary. A Treasury official said discussions were now centred on ironing out technical details.
'We're going to try to finish things, so that's the objective,' Lutnick told reporters outside the meeting. 'I think we're working on all sorts of trade issues and I think the talks are going really, really well.'
Tom Essaye at research firm The Sevens Report, said that 'any materially positive or negative trade talk headlines out of London where US and Chinese negotiations remain underway could meaningfully move markets today' before focus on Wall Street shifts to America's inflation figures for May on Wednesday US time.
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