PERTH: The Australian sharemarket has pared earlier gains to trade slightly higher at noon, after racing out of the blocks at the open.
Investors are bracing for a continuation of last week’s topsy-turvy trade as markets look towards Thursday’s US Federal Reserve policy meeting.
At 12.05pm (AEST), the benchmark S&P/ASX200 was 12.9 points, or 0.25 per cent, higher at 5084, while the broader All Ordinaries added 11 points, or 0.22 per cent, to 5107.3.
CMC chief market analyst Ric Spooner said trader thinking in the week ahead will be dominated by the Fed decision.
“Although we are now only four days out from the decision, there is little sign of a market consensus developing, either on what the Fed will do or on how markets will react if they do lift rates,” he said.
“Major events like the Fed decision can often produce calm before the storm effect as traders take risk off the table, preferring to react to the news rather than pre-empt it.”
However, Mr Spooner said the high level of market volatility over recent weeks means this scenario is “by no means guaranteed”.
Rivkin chief executive Scott Schuberg said investors “could probably toss a coin right now” in order to anticipate how sentiment will emerge after the US Fed meets.
“All the analysis and commentary in the world won’t do much good this week, and sentiment won’t necessarily be driven by the actual interest rate decision or even the statement that accompanies it,” Mr Schuberg said. “It will be driven by what the herd does.”
Healthcare stocks and the financial sector were trading firmer at noon, but the positivity was offset by a downbeat energy sector.
On Friday global oil prices retreated as US Nymex crude slumped 2.8 per cent, while global benchmark Brent crude dipped 1.5 per cent.
Meanwhile Oil Search formally knocked back Woodside’s $11.7 billion takeover offer, pushing both stocks lower.
