Local stocks set to gain on US jobs, China data

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The Australian sharemarket is expected to open higher following the release of better-than-expected jobs figures in the US and further evidence of a rebound in China.

On the ASX24, the December share price index futures contract was six points higher to 4566 after closing at a seven-week high on Friday. The Aussie dollar was again pushing towards $US1.05. It was recently buying $US1.0493, up from $US1.0477 late on Friday. It was also buying 86.57 yen, 81.43 euro cents and 65.44 pence.

A good jobs report and strong data from China could help to support local stocks today. On Friday, US nonfarm employment increased by 146,000 jobs last month, data showed, defying expectations of a sharp pull-back related to superstorm Sandy.

Meanwhile in China, industrial output and retail sales exceeded forecasts last month while inflation rebounded from a 33-month low in signs the economic recovery is accelerating.

Making news today

In economics newsAustralian Bureau of Statistics (ABS) housing finance for October

In company news:Atech Holdings annual general meetingBannon annual general meetingRobe Australia annual general meeting

Making news this weekTuesday: NAB business conditions and confidence for NovemberWednesday: Westpac consumer confidence for December, RBA credit card balances for OctoberThursday: Melbourne Institute consumer inflation expectation for December

Making news in the US this week:Tuesday: International trade for OctoberWednesday: US Federal Reserve meting and Ben Bernanke press conferenceThursday: Jobless claim, producer price index for November, retail sales for NovemberFriday: Consumer price index for November, Industrial production for November

Early gains

AMP Capital’s chief economist Shane Oliver predicts the local market will continue to strengthen and push towards the 4600 level on the back of an ongoing US market rally.

“It looks like we’ll open with some modest positive gains,” Dr Oliver said.

A surprise fall in the US unemployment rate to 7.7 per cent for November gave markets a boost on Friday. The Dow Jones Industrial Average rose 80.25 points (0.61 per cent) to 13,154.29.

Dr Oliver said most of the attention this week will be on the uncertainty surrounding the “fiscal cliff” in the US.

“There’s not a lot of local data out this week,” he said. Investors will carefully watch for any signs of progress as the early January deadline approaches.

How we fared last week

Australian shares rose 0.9 per cent on Friday to reach a seven-week closing high, with top miners supported by rebounding iron ore prices and the broader market up ahead of China’s industrial production data over the weekend.

The benchmark S&P/ASX200 index closed 42.5 points higher, or 0.94 per cent, at 4,551.8 points, while the broader All Ordinaries index had risen 40.2 points, or 0.89 per cent, to 4,555.9 points.

BusinessDay with agencies

The original release of this article first appeared on the website of Hangzhou Night Net.

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