ASX Set to Rebound After Strong Wall Street Performance

On Friday, Wall Street saw a significant rebound as bargain hunters ventured back into the market, causing a rise in all sectors following a challenging period of selling that had pushed the market into correction territory.

This positive momentum from Wall Street is expected to benefit the Australian Securities Exchange (ASX) as it prepares for a promising start to the week.

Market Overview

ASX 200 futures have indicated a rise of 1.1%, reaching 7,867 points, reflecting optimism from global markets. Meanwhile, the Australian dollar is also on the upswing, trading at 63.23 US cents, representing a 0.6% increase.

Wall Street's strong performance on Friday included notable gains: the Dow Jones rose by 1.7%, the S&P 500 increased by 2.1%, and the Nasdaq experienced a rise of 2.6%. In Europe, markets also performed well with the DAX climbing by 1.9%, the FTSE gaining 1.1%, and Eurostoxx up by 1.4%.

Current Commodities Prices

In commodities, spot gold saw a slight decline of 0.1%, settling at $US2,984 per ounce. Brent crude increased by 1.0% to $US70.58 per barrel, and iron ore rose by 1.7%, reaching $US104.00 per tonne. However, Bitcoin dipped by 0.3%, trading at $US83,290.

Corporate Developments

In the EFTPOS sector, there is news regarding potential acquisitions. New Zealand-based operator Smartpay has received two takeover offers, including one from ASX-listed Tyro, which is proposing to buy 100% of Smartpay's shares at NZ$1.00 each (about 90 Australian cents). This follows Smartpay's last trading price of 63 cents on the ASX.

Both proposals for Smartpay are preliminary and conditional, amid ongoing discussions about the Reserve Bank of Australia (RBA) reviewing transaction fee restrictions for debit card payments.

Market Sentiment and Future Outlook

Despite the positive rebound, analysts caution that the fundamental issues affecting the market remain unresolved. The S&P 500, for example, is down over 10% from its recent peak, indicating that while the rally offers some relief, underlying market uncertainties persist. Baird investment analyst Ross Mayfield highlights that while August saw a market decline of 2.4%, the conditions may be ripe for a rally due to being oversold.

European markets have shown more resilience compared to US markets, with only minimal losses in the previous week. This stability may lead to further fluctuations in response to geopolitical tensions and economic data releases expected from China.

This week will also see key economic indicators from China, including retail sales and industrial production data. Attention will be on a joint media conference from China's central bank and finance ministry discussing measures to stimulate consumption.

As the week progresses, the market’s attention will remain on global economic developments, and it is poised for a potentially busy trading atmosphere.

ASX, WallStreet, Rebound