Australian shares look set to open little changed as investors weigh losses on Wall Street against a rebound in Chinese manufacturing.
ASX SPI200 index futures edged up five points or less than 0.1 per cent to 6861 as US stocks declined during a holiday-shortened session on Friday. However, Chinese economic data released over the weekend may give the market a leg-up.
Factory activity in China increased for the first time in seven months during November, according to figures released on Saturday. The official purchasing managers' index (PMI) rose to 50.2 from an October reading of 49.3. Readings above 50 indicate expanding activity. Economists had expected a PMI of around 49.5. New orders were the highest since April. A separate measure of activity in services industries also came in stronger than expected.
US stocks suffered a post-Thanksgiving hangover during Friday's abbreviated session. The major indices opened in the red after President Donald Trump signed off on legislation supporting Hong Kong protesters, and closed at session lows following reports the White House may expand a ban on trade with Chinese tech giant Huawei.
The S&P 500 shed 13 points or 0.4 per cent on below-average volumes as many traders enjoyed a long weekend. The Dow gave up 113 points or 0.4 per cent and the Nasdaq 40 points or 0.46 per cent.
November was a strong month, despite Friday's setbacks. The S&P 500 put on 3.4 per cent, the index's best return since June. The Dow gained 3.7 per cent and the Nasdaq 4.5 per cent.
Retail stocks took a hit following reports foot traffic was down at the start of Black Friday sales. The S&P 500 retail sector slipped 0.8 per cent as fewer people than in previous years queued outside stores for one of the biggest days on the US shopping calendar.
Australian stocks fell back from record levels on Friday as US index futures came under pressure, and institutional traders locked in profits during the last session of a solid month. The ASX 200 slipped 18 points or 0.3 per cent on the day, but made 2.7 per cent over the month.
The local market may face headwinds from commodity markets today. Crude, iron ore and most industrial metals declined on Friday night. Gold was boosted by trade tensions.
BHP and Rio Tinto both fell in overseas trade after the spot price for iron ore landed at Tianjin eased 50 cents or 0.6 per cent to $US87.25 a dry ton. BHP's US-listed stock lost 0.62 per cent and its UK-listed stock 1.97 per cent. Rio Tinto gave up 0.76 per cent in the US and 1.6 per cent in the UK.
Oil slumped on reports that Saudi Arabia may not support an extension to production caps at this week's OPEC meeting. Brent crude settled $1.44 or 2.3 per cent weaker at $US62.43 a barrel. The US benchmark tumbled 5.1 per cent. However, prices may rebound this morning following weekend reports that the Saudis will push for higher prices to support the IPO of state-owned oil giant Aramco.
Nickel fell to a four-month low during a generally weak session on the London Metal Exchange as traders fretted that Hong Kong legislation in the US might derail trade talks. Nickel lost 2.5 per cent on the day and 18 per cent during November as traders took profits on a rally fuelled by an Indonesian export ban. Copper shed 0.4 per cent on Friday, lead 0.3 per cent and zinc 0.1 per cent. Aluminium gained 1.6 per cent and tin 0.5 per cent.
Gold rebounded as trade doubts weighed on risk assets. Gold for February delivery rallied $7.40 or 0.5 per cent to $US1,460.80 an ounce.
The dollar opened a new week a tenth of a cent higher at 67.71 US cents.
The start of a new month brings a deluge of economic data. Quarterly company operating profits are due today, along with monthly building approval and job ads. The Reserve Bank meets tomorrow, but is not expected to move on rates until next year at the earliest. (The ASX's RBA Rate Indicator lists the odds on a cut tomorrow at just 11 per cent.) Quarterly GDP figures are due on Wednesday, retail sales and trade data on Thursday. China releases an alternative take on factory activity today. Wall Street also has manufacturing figures due tonight.