Aust shares expected to open flat
Market watch top headlines
The Australian share market is expected to open flat on Monday as investors await earnings results for banking, mining and retail giants.
The US market soared to new heights on Friday, with the broad-based S&P 500 hitting a five-year high and the Nasdaq technology index achieving its best result since 2000.
But CommSec chief economist Craig James said news of China's trade surplus widening by 7.7 per cent in the year to January had already buoyed the Australian market on Friday, ahead of New York trade.
This means the focus on Monday will turn to upcoming earnings data this week for major listed companies, including the Commonwealth Bank of Australia, miner Rio Tinto and retailers Wesfarmers and David Jones.
"We've seen pretty good gains for the sharemarket - we want to see the reasons for our rally being validated, not just earnings but the expectation of companies," Mr James told AAP.
The futures market was expecting the Australian market to open nine points lower, but Mr James said that caution looked overstated as investors looked for company forecasts for the next six to 12 months.
"Perhaps the futures market is maybe a little bit negative," he said.
"But I think it will be flat rather than down."
The closure of key Asian markets for Chinese New Year this week is also expected to reduce trading volumes.
Australian Bureau of Statistics housing finance data for December is due for release on Monday, but this is not expected to move the market.
During Friday trade, the Dow Jones Industrial Average reached a post-crisis high above 14,022, but slipped back to end 48.92 points, or 0.35 per cent firmer, at 13,992.97.
Hitting a five-year high on Friday, the S&P 500 index rose 8.54 points, or 0.57 per cent, to 1,517.93.
Meanwhile the tech-rich Nasdaq Composite Index touched a 12-year high, jumping 28.74, or 0.91 per cent, to 3,193.87.
European markets also closed in stronger territory on Friday, after EU leaders adopted a seven-year budget for the 27-member union, with London's FTSE 100 index of top companies rising 0.78 per cent to 6,276.98 points.
The Australian share market closed firmer on Friday, with the benchmark S&P/ASX200 index increasing by 35.6 points, or 0.72 per cent, to 4,971.3, and the broader All Ordinaries index rising 33.6 points, or 0.68 per cent, at 4,989.4.