**ASX Poised for Gains as Robust US Earnings Lift Global Sentiment**
*Adapted from an article by Paddy Manning, AFR*
The Australian share market is expected to open on a positive note, riding on the back of upbeat earnings results from several major US companies. Investors are showing renewed optimism as global equity markets gain momentum, underpinning the local bourse’s recovery. This renewed confidence comes even as broader economic headwinds and geopolitical uncertainty linger on the horizon.
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### US Earnings Drive Global Markets Higher
– Wall Street’s strong earnings season has set a constructive tone for risk assets.
– Robust quarterly results from US corporate heavyweights including major banks and technology companies have provided fresh catalysts.
– These announcements have reassured investors about the underlying health of the corporate sector, despite worries over inflation, interest rates, and supply chain disruptions.
As US stocks extend their upward trajectory, the positive sentiment has spilled over to Asia-Pacific markets, with Australia’s benchmark S&P/ASX 200 Index forecasted to register appreciable gains at the opening bell.
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### Factors Supporting ASX’s Prospects
**Strong Lead from Overseas Markets**
– The S&P 500 and tech-centric Nasdaq both closed higher after upbeat revenue and earnings figures from influential US companies.
– Financials, consumer discretionary, and technology sectors spearheaded gains.
– Major US banks eased market anxiety by highlighting robust balance sheets and resilient loan growth.
**Commodities and the Australian Dollar**
– Commodity markets have also lent a hand, with prices for key Australian exports like iron ore and copper both holding up.
– A stable or higher Australian dollar further signals foreign investor confidence in the local market.
**Market Technicals and Valuations**
– The global risk-on move is supported by technical factors, with many equity indexes breaking above key resistance levels.
– Valuations remain attractive relative to historical averages, given ongoing earnings growth and supportive monetary policies.
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### Australian Equities: Beneficiaries of Positive Global Momentum
The ASX’s performance is intimately tied to global capital flows and international market trends. Australian banks, miners, and energy producers often move in concert with shifts in risk sentiment globally.
**Key Sectors to Watch**
– **Banks**: Benefiting from higher rates, strong capital positions, and optimism over local economic growth. Investors will be watching the ‘Big Four’ for earnings guidance.
– **Mining and Resources**: Major players like BHP, Rio Tinto, and Fortescue Metals have ridden the wave of sustained demand for iron ore, copper, and lithium. Any sign of increased Chinese industrial activity can provide a further boost.
– **Consumer and Retail**: These sectors are supported by the resilience in consumer spending and signs of recovery in discretionary categories.
– **Technology and Healthcare**: Bolstered by global trends, Australian technology firms and biotech companies mirror their US counterparts’ performance.
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### Risks Lurking in the Background
Despite the current buoyant mood, there are persistent
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