Shares to edge higher in ongoing recovery

The Australian share market looks set for a weak opening with stock futures pointing to a 40 point or 0.7 per cent fall at the opening.

Shares are tipped to be slightly higher in early trade on the Australian market as part of what one expert said is the ASX’s skittish recovery from coronavirus lows.

The SPI 200 futures contract was higher by 32 points, or 0.59 per cent, to 5,436.0 at 0800 AEST on Monday, indicating a small gain in early trade.

This follows a thin positive lead from Wall Street where the three major US indexes closed higher on Friday despite weaker-than-expected US economic data, amid optimism that easing coronavirus restrictions would boost activity this month.

CommSec chief economist Craig James says Australian equities have likely bottomed out and are undergoing a skittish recovery – as long as the nation continues to keep coronavirus cases low.

He noted the ASX200 had risen over six of the past seven weeks.

More Australians have returned to work, and cafes, restaurants and pubs have re-opened – albeit at reduced capacity – as part of eased coronavirus restrictions.

However government leaders have warned the number of infections will climb as people mingle in greater numbers.

This week, local investors will closely watch remarks by Reserve Bank Governor Philip Lowe in the minutes of the central bank’s monetary policy meeting.

US Federal Reserve Chair Jerome Powell’s testimony to the US Senate banking committee on Wednesday (AEST) will be of interest, too.

The Australian Bureau of Statistics will issue data on the coronavirus pandemic’s impact on households later on Monday.

The Australian dollar was buying 64.13 US cents at 0800 AEST, down from 64.62 US cents at the close of trade on Friday.

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