SYDNEY: The Australian sharemarket has started the week on the front foot amid a global stockmarket rally as central banks pursue more monetary easing.
The local market is being swept up as global investor sentiment is fuelled by dovish central bank moves, after the European Central Bank strongly hinted at a December easing program, while the People’s Bank of China on Friday slashed interest rates and reserve requirements on its banks.
For China, it represented the sixth cut to benchmark interest rates in 12 months, with Beijing on edge about slowing growth. Wall Street bounced 1 per cent higher while euro markets jumped nearly 3 per cent on Friday.
At the 10.15am (AEST) official market open, the benchmark S&P/ASX200 index gained 25.6 points, or 0.48 per cent to 5377.2, while the broader All Ordinaries index was up 25.5 points, or 0.47 per cent, at 5413.6.
“There are now two central banks joining the early Christmas present stimulus program, IG market strategist Evan Lucas said. By the end of the week there could be three he said, referring to the Bank of Japan which meets on Friday, while the US Federal Reserve may not move on rates until mid 2016.
Locally, all eyes will be on the mid-week inflation figures being released by the Australian Bureau of Statistics, which may determine whether the Reserve Bank of Australia eases local rates further.
“That would certainly keep the door open for the Reserve Bank to cut interest rates, particularly after the major banks lifted interest rates because of capital requirements,” CommSec chief economist Craig James said.
