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Market to open higher, ahead of quiet week

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AAP

2013-01-20

The Australian market is expected to get off to a slightly positive start on Monday with inflation figures the focus of a fairly quiet week.

CommSec economist Craig James said on Sunday he expected the market to open between about 10 and 17 points higher.

The ASX 24 March share price index futures contract indicates the market will open 17 points higher at 4,757 on Monday.

Mr James said the market's focus this week would be on the Australian Consumer Price Index and inflation figures which would be released on Wednesday.

"This week's really about inflation," he said.

"We haven't really got much else on."

However, he said inflation was expected to be fairly benign with the underlying rate predicted to rise 0.6 of one per cent to around 2.5 per cent.

"The Reserve Bank at the moment really wouldn't have any real concern with inflation," he said.

"Because inflation is under control that leaves the door open for rate cuts should they become necessary but I think given the optimism we're seeing globally, the potential for improvement here domestically with the home market the Reserve Bank is probably going to remain on the interest rate sidelines.

In the US on Friday the S&P 500 and the Dow hit their best levels since late 2007, helped by news that Republicans might agree to raise the debt ceiling, but poor earnings from Intel pulled the Nasdaq lower.

European share trading posted mixed results on Friday, with London gaining on Chinese growth data that beat expectations while Frankfurt and Paris slipped back on disappointing European and US figures.

Mr James said the local market would be keeping an eye on results from the US earnings season this week.

There could be some profit taking during the week as investors take advantage of the local market's steady improvement over the last few months, he said.

"I think along the way as our market continues to rise you're going to get people wanting to take profits regularly," he said.

"We haven't seen much profit taking yet so at some time we're going to see people taking money off the table.

"Perhaps they might take it before Wednesday before we have the inflation figures."