The Australian share market has opened slightly in the red, after falls on Wall Street on Friday cemented the third straight weekly decline for US markets.
- Real estate and mining stocks were dragging on the ASX in early trade
- CBA economists have upgraded their economic growth forecasts due to better-than-expected household spending
- US markets posted their third consecutive weekly decline
By 10:40am AEST, the ASX 200 index had lost 0.1 per cent or 4 points, to 5,860 points.
Real estate was the worst-performing sector in early trade, led by falls for Unibail-Rodamco-Westfield (-5pc), Dexus (-3.8pc) and Scentre Group (-3.1pc).
Mining stocks were weighing on the market, including Fortescue (-0.6pc) and BHP (-0.6pc), as well as gold miners.
The major banks were mixed, with ANZ (-0.2pc), the Commonwealth Bank (-0.3pc) and NAB (-0.4pc) shares lower, while Westpac (+0.3pc) was higher.
Around the region, New Zealand’s market was down by 0.2 per cent, while Seoul’s Kospi was modestly higher.
The Australian dollar was higher (+0.2pc) against the greenback, buying around 73 US cents.
Economists at the Commonwealth Bank have raised their forecasts for economic growth, and now expect a 2 per cent increase in Australia’s gross domestic product in the current quarter.
That changes their annual forecast for 2020 to a 3.3 per cent contraction, compared to their previous estimate of a 4.3 per cent slump.
CBA senior economist Gareth Aird said the improved forecasts were based on data indicating people are spending more, as well as the better-than-expected jobs report for August.
The bank’s internal credit and debit card data shows a substantial increase in spending, despite the lockdowns in Victoria.
“What has surprised us is the strength of spending outside of Victoria,” Mr Aird said.
US stocks fall for a third straight week
On Friday, the major US indices closed lower, with the S&P 500 losing 1.1 per cent to a six-week low.
“It was a lacklustre end to the week as equity markets again failed to garner support from the super-accommodative guidance of central banks,” ANZ economist Hayden Dimes wrote.
“Attention is turning back to negotiations on supplementary fiscal stimulus and the forthcoming US election.”
In Europe, coronavirus cases and hospitalisations continued to rise, raising concerns about a worsening outbreak.
European countries from Denmark to Greece announced new restrictions on Friday to curb surging infections in some of their largest cities, while Britain was reportedly considering a new national lockdown.