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Record night on Wall Street to boost ASX

The share market looks set for solid opening gains after Wall Street ended its best week since August at a fresh record.

ASX SPI200 index futures rallied 36 points or 0.5 per cent to 7044, positioning the ASX 200 index for a possible tilt at 7100. The benchmark Australian index drew within 12 points of that target on Friday before easing to 7064, a gain of 22 points or 0.3 per cent.

The local market has started the new year at a sprint, surging 5.7 per cent since re-opening on January 2. However, a public holiday in the US tonight may dampen market participation before US quarterly company reports provide direction later in the week. The New York Stock Exchange closes tonight for the annual Martin Luther King Jr holiday.

Wall Street ended last week at a high after solid data from China and the US showed both economies weathering the effects of their drawn-out trade war. Chinese industrial production was much stronger than expected last month and US housing starts were the highest in 13 years.

The S&P 500 rose 13 points or 0.39 per cent to a new peak as all three benchmark indices delivered their best percentage gains since the last week of August. For the week, the S&P 500 put on almost 2 per cent, extending its year-to-date advance to 3.1 per cent. The Nasdaq climbed 32 points or 0.34 per cent for a weekly gain of 2.3 per cent. The tech-heavy index has put on 4.5 per cent this year. The Dow brought up the rear with a rise of 50 points or 0.17 per cent for a weekly total of 1.8 per cent and 2020 tally of 2.8 per cent.

The bulls dominated a week that saw the US and China sign a phase-one trade deal, and a new US corporate reporting season deliver well-received earnings from the likes of Goldman Sachs, Morgan Stanley and Bank of America. The season is off to a promising start, with 72 per cent of companies beating analyst earnings targets. This week brings updates from the likes of IBM, Intel, Procter & Gamble, American Express and Netflix.

The big two local miners tested their highest levels in at least five months on Friday and may have more in them following overseas gains. BHP's US-listed stock gained 1.66 per cent and its UK-listed stock 2.3 per cent. Rio Tinto surged 2.57 per cent in the US and 2.75 per cent in the UK. The spot price for iron ore landed in China edged up 50 cents or 0.5 per cent to $US95.75 a dry ton.

Oil edged higher at the end of a week when traders weighed a reduction in US-Iran tensions against the improved demand outlook from a US-China trade deal. Brent crude settled 23 cents or 0.4 per cent ahead at $US64.85 a barrel. The international benchmark eased 0.2 per cent over the week.

Gold ended a downbeat week with modest gains on Friday. Gold for February delivery settled $9.80 or 0.6 per cent stronger at $US1,560.30 an ounce. Precious metals struggled for traction last week as demand for risk assets outshone havens.

Copper gave up early gains, easing for a third straight session. Benchmark copper on the London Metal Exchange shed 0.1 per cent, aluminium 0.2 per cent and lead 1.3 per cent. Nickel gained 1 per cent, zinc 0.3 per cent and tin 0.8 per cent.

The dollar opened flat this morning at 68.71 US cents.

A slow start to the trading week, with nothing on the economic calendar to provide direction today. Participation will likely be depressed until after the US long weekend. US corporate earnings will set the tone later in the week. The big-ticket local news item comes on Thursday, when the keenly-watched monthly jobs report will clarify the odds that the RBA will cut the cash rate next month.

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