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ASX to start flat amid investor caution

Shares are likely to start flat on the Australian market after a mixed lead from Wall Street and amid cautious sentiment ahead of the federal government’s impending budget update later this week.

The Australian SPI 200 futures contract was up by 2.0 points, or 0.03 per cent, to 6004.0 points at 0800 AEST on Monday.

US shares closed mixed on Friday as investors there weighed the prospect of more fiscal stimulus against fears of further business disruptions as COVID-19 cases rise.

The Dow Jones Industrial Average fell 0.23 per cent to end at 26,672.36 points, while the S&P 500 gained 0.29 per cent to 3,224.75 and the Nasdaq Composite rose 0.28 per cent to 10,503.19.

In Australia, investors will be remain cautious ahead of key macroeconomic events and worries about a resurgence in coronavirus cases in New South Wales and Victoria.

On Tuesday, the Reserve Bank will release minutes from it’s July board meeting, followed by a speech by Governor Philip Lowe.

Federal treasurer Josh Frydenberg is due to release an economic and fiscal update on Thursday.

On Friday, the benchmark S&P/ASX200 index finished 22.7 points, or 0.38 per cent higher, at 6033.60 points after a late recovery.

The All Ordinaries index closed 21.9 points, or 0.36 per cent higher, at 6144.90.

The Australian dollar was trading at 69.91 US cents at 0800 AEST, barely changed from 69.86 US cents at Friday’s close.

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