ASX set to dive as Wall St rally fades

The Australian share market is expected to slide at the open after Wall Street shed its early gains on a steepening oil price decline.

The SPI200 futures contract was down 52 points, or 0.99 per cent, at 5,190.0 points at 0800 AEST on Wednesday, suggesting local stocks will extend losses the start of trade.

The S&P/ASX200 benchmark index gained 2.6 per cent in the first 10 minutes of trade on Tuesday but ended up finishing down 34.5 points, or 0.65 per cent, to at 5,252.3 points.

The All Ordinaries index shed 22.3 points, or 0.42 per cent, to 5,301.3, after going as high as 5,464.2.

Much like local equities, US stocks built early gains on Tuesday following tentative signs coronavirus outbreaks in some of the biggest hot spots are easing.

However, the major overseas indices slipped as oil prices plunged late in the session.

West Texas Intermediate crude futures settled US$2.45, or 9.4 per cent, lower on Tuesday at US$23.63 a barrel, accelerating their losses late in the day, ahead of weekly US crude oil inventory reports.

Brent crude futures settled at US$31.87 a barrel, losing US$1.18, or 3.6 per cent.

IG Markets analyst Kyle Rodda said lion’s share of Wall Street’s losses came from the heavily weighted US tech sector, which accounted for half of the market’s fall.

On local shores, Westpac is expecting a modest increase of 1.5 per cent in February home loan approvals, ahead of a steep drop through March and April, as the sector moves into a virus-related shutdown.

The Australian dollar was buying 61.69 US cents at 0800 AEST, down from 61.84 US cents at the close of markets on Tuesday.

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