Strength in commodity prices looks set to cushion local shares following mild falls on Wall Street as investors awaited trade news.
ASX index futures ended the night session modestly lower, down 13 points or 0.2 per cent at 6716 as multi-week highs in iron ore and copper lifted BHP and Rio Tinto in overnight trade.
US stocks closed at session lows as investors awaited trade news ahead of Sunday’s deadline for a new round of US tariffs on Chinese imports. The S&P 500 slipped 10 points or 0.32 per cent, ending a three-session winning run. The Dow dropped 105 points or 0.38 per cent and the Nasdaq 35 points or 0.4 per cent.
Wall Street finished last week near record levels after unexpectedly strong November jobs data soothed growth concerns. Risk appetite weakened as the weekend passed without fresh news on trade negotiations. White House officials said last week they expected to sign a phase-one deal with China before tariffs come into force on $156 billion of Chinese goods on Sunday.
Trade-sensitive stocks came under pressure. Market heavyweight Apple fell 1.4 per cent, Boeing 0.85 per cent and an index of semi-conductor companies 0.54 per cent.
Chinese trade data released over the weekend underlined the impact of the trade war. Exports to the US were down 25 per cent on the same time last year. However, a pick-up in imports suggested government measures to support the domestic economy were gaining traction.
The ASX 200 rose for a third session, gaining 23 points or 0.3 per cent as resource stocks were boosted by gains in iron ore, copper and crude oil.
Iron ore surged as Chinese steel prices rose 3 per cent to their highest in four months. The spot price for ore landed at Tianjin jumped $4.95 or 5.5 per cent to $US94.35 a dry ton, its strongest price since October. Prices for coking coal also rose more than 1 per cent. BHP’s US-listed stock gained 0.99 per cent overnight and its UK-listed stock 0.67 per cent. Rio Tinto added 0.96 per cent in the US and 0.95 per cent in the UK.
Copper climbed to its highest level in almost five months on news of strengthening Chinese imports. Benchmark Copper advanced 1.4 per cent on the London Metal Exchange to $US6,075 a tonne. Data released yesterday showed Chinese copper imports increased 12.1 per cent during November to their strongest level of the year. Among other metals, aluminium eased 0.5 per cent and nickel 1 per cent. Tin improved 0.3 per cent. Zinc and lead were broadly steady.
Oil fell back after its best week in almost five months. Brent crude settled 28 cents or 0.4 per cent lower at $US64.11 a barrel. The global benchmark put on 6.5 per cent last week after the Saudi-led OPEC cartel and its allies agreed to reduce production to support prices.
Gold marked time as traders awaited clarity on trade and US rates. February gold settled 20 cents or 0.01 per cent weaker at $US1,464.90 an ounce.
The dollar eased a tenth of a cent to 68.3 US cents.
The day ahead brings several potential market mood-changers. Reserve Bank Governor Phil Lowe is due to deliver a speech and take questions at a Sydney summit at 9.05 am EST. Monthly business confidence and quarterly house-price data are scheduled for 11.30 am. Chinese inflation figures follow at 12.30 pm. Wall Street has nothing major on the calendar until tomorrow night.