Australian shares are set to open modestly higher, with ASX 200 futures pointing up 9 points, or 0.1%, to 8,684. The local market is coming off a strong session, buoyed by gains in heavyweight mining stocks and positive offshore leads.
The S&P/ASX 200 climbed 78.5 points, or 0.9%, on Monday to close at 8,699.90, marking its highest level in 20 days. All 11 industry sectors finished in positive territory, reflecting broad-based buying.
Mining stocks led the advance, with the sector up 2.4%. Fortescue rose 1.7%, BHP gained 1.6% and Rio Tinto added 1%, supported by strength in copper and gold prices.
US: Wall Street rally erases December losses
US equities rallied strongly in afternoon trading, pushing major indices closer to record territory. By around 3.15pm New York time, the S&P 500 was within 50 points of its all-time high set earlier this year.
The benchmark index is now on track for an eighth consecutive monthly gain, its longest winning streak since 2018, with more than 400 stocks advancing to start the week, according to Bloomberg. Financials, materials and energy led the rally, while both oil and gold posted gains of more than 2%.
Market volatility eased further, with the VIX falling to its lowest level since late August. Strategists pointed to the clearing of technical hurdles, including options expiry and index rebalancing, as supportive factors heading into the traditionally strong Santa Claus rally period.
However, Nike continued to lag broader market strength, falling another 2% and extending its 5-day decline to 15%.
Europe: Holiday liquidity weighs on shares
European equities edged lower as investors navigated a holiday-shortened week marked by thin trading volumes. The pan-European STOXX 600 slipped 0.09% to 586.99, while London’s FTSE and France’s CAC 40 fell 0.3% and 0.4%, respectively.
The modest pullback followed a record close in the prior session. While the STOXX 600 gained more than 1% last week on easing US inflation and expectations of further Federal Reserve rate cuts, momentum slowed as investors reduced exposure ahead of year-end.
Beverage stocks were a notable drag, with Diageo down 3.7%, Pernod Ricard falling 2.9% and Anheuser-Busch InBev lower by 2.5%. Analysts cited low liquidity and portfolio repositioning as key drivers of short-term volatility.
Commodities: Gold surges on rate cut expectations
Gold prices surged above their previous October peak, climbing to around $US4,389 an ounce as traders bet on US interest rate cuts next year and rising geopolitical tensions. Spot gold later extended gains to $US4,437.86 an ounce, up 2.3% on the session.
Oil prices also strengthened, with Brent crude rising 2.7% to $US62.12 a barrel. Iron ore edged 0.2% higher to $US104.90 a tonne, offering additional support to Australian mining stocks.
In currency markets, the Australian dollar jumped 0.7% to US66.56¢, while Bitcoin slipped 0.4% to $US87,922.
Christmas Dates: Holiday Trading Schedules in Focus
Investors are now turning attention to shortened trading schedules over the Christmas period. The ASX will close early at 2.10pm on Christmas Eve and will remain closed on December 25 and December 26.
In the US, the New York Stock Exchange will close at 1pm on December 24 and will be shut on Christmas Day. Trading resumes on December 26, although it is typically characterised by very low volumes.
With liquidity expected to thin further, markets may remain susceptible to sharper moves despite lighter participation.