Australian shares outlook - Higher on gains in US markets, commodity prices

Australian shares outlook - Higher on gains in US markets, commodity prices

	Published : Fri, 20 Jul 2007 00:23 By : Agencies Print this Story

SYDNEY (Thomson Financial) - Australian shares may open stronger Friday as investors draw inspiration from a rally in US stocks which pushed both the Dow industrials and the S&P 500 index to new record highs after a series of

better-than-expected corporate earnings.

Resources stocks should lead the gains following higher oil, gold and base metals prices on Thursday.

Bell Potter Securities private client advisor Stuart Smith said the market should end the week on a positive note.

'The market has now gone into an uptrend following gains yesterday - it is a clear break on the upside on my chart,' Smith said.

The S&P/ASX 200 September futures contract ended its overnight session up 21.0 points at 6,405.0, suggesting a positive start to trading.

On Thursday, the S&P/ASX 200 rose 55.1 points or 0.9 percent to 6,384.2 and the All Ordinaries Index advanced 51.8 points or 0.8 percent to settle at 6,419.0.

In New York, share prices were buoyed by better-than-expected earnings including IBM's which

posted a 12 percent jump in quarterly profit and raised its outlook.

The Dow Jones Industrial Average closed above 14,000 points for the first time, ending up 82.19 points or 0.59 percent at 14,000.41. The Standard & Poor's 500 index rose 6.91 points or 0.45 percent to a record 1,553.08.

News Corp shares climbed 1.28 percent as the company moved closer to gaining control of Dow

Jones & Co.

In London, shares closed higher as Wall Street remained firm after a slew of companies reported upbeat earnings, with UK miners helping to fuel the blue chips. The FTSE 100 index advanced 73.1 points or 1.11 percent to 6,640.2.

BHP Billiton rose 3.81 percent and Rio Tinto gained 3.29 percent.

Crude oil prices continued to surge Thursday, pushed higher by supply worries after production problems in Angola and the surge in Chinese economic growth. The August crude oil contract rose 87 cents to 75.92 US dollars per barrel on the New York Mercantile Exchange.

Base metal prices moved sharply higher on the London Metal Exchange, supported by news that China's economy had expanded by 11.9 percent year-on-year in the second quarter.

Gold prices were driven higher by a weaker US dollar as well as the inflation risk posed by higher oil prices. The August gold contract rose 4.40 dollars to 678.10 dollars an ounce on the New York Mercantile Exchange.

Ahead in Australia, new motor vehicles sales for June will be released.

(1 US dollar = 1.14 Australian dollars)

bruce.hextall@thomson.com

bhx/ms

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