Australian shares are set to open higher, as US investors embrace risk on expectations of rate cuts in the new year.

ASX futures were up 0.5 or 36 points as of 8:30am on Wednesday, suggesting a higher open.

U.S. stocks extended their recent rally with the Dow Industrials ending at a record high for the fifth consecutive session.

The DJIA rose 251 points, or 0.7%, to 37557, the S&P 500 gained 0.6% to 4768 and the Nasdaq added 0.7% to 15003.

In commodity markets, Brent crude oil rose 2.0% to US$79.52 a barrel while gold was up 0.6% to US$2,039.97.

In local bond markets, the yield on Australian 2 Year government bonds was up at 3.85% while the 10 Year yield was also up at 4.11%. US Treasury notes were down, with the 2 Year yield at 4.44% and the 10 Year yield at 3.93%.

The Australian dollar hit 67.58 US cents up from the previous close of 67.06. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, was down at 96.59.


Chinese shares closed slightly higher as drinks makers gained, but the benchmark Shanghai Composite Index stayed below the key 3000 level. Market sentiment remained cautious as the year draws to an end. The Shanghai index edged up to 2932.39, lingering around its lowest closing levels so far this year. The Shenzhen Composite Index rose 0.1% to 1807.54 while the ChiNext Price Index added 0.4%. Beverage stocks led the gains, with liquor company Kweichow Moutai up 0.8%. Shanxi Xinghuacun Fen Wine Factory rose 0.2%. Coal and real-estate stocks led the losses. Shanxi Coal International slid 1.1%, while developers Poly Developments and Greenland Holdings fell 1.7% and 1.5% respectively.

Hong Kong shares are lower in early trade, with property and banking stocks continuing to weigh on the index. The benchmark Hang Seng Index is down 0.9% at 16481.06. Among individual stocks, Country Garden Services is down 5.1% after it warned of lower profit in 2023 due to impairment charges. Other real estate-related stocks that are down include Longfor and China Resources Mixc Lifestyle, both trading 0.2% lower. "Property investment remains in a double-digit contraction and the largest drag of FAI (fixed asset investment)," Nomura says in a note. In the financial space, China Merchants Bank is down 0.8%, while Citic and China Construction Bank are down 0.4% each.

The Nikkei Stock Average rose 1.4% to close at 33219.39 after the Bank of Japan decided to keep rates negative, weakening the yen and boosting sentiment toward export-led companies. Sony closed 0.4% higher among consumer-related stocks, while Hitachi gained 0.9%. In the automobile segment, Toyota Motor added 0.8%, Nissan Motor rose 0.9%, and Honda Motor climbed 1.5%. The USD/JPY was 0.8% higher at 143.49.

Indian shares edged higher, lifted by utility and power stocks. Investors await a batch of key U.S. economic data this week, including the November core personal consumption expenditure index, the Fed's preferred measure of inflation, for more cues amid a slow market ahead of the holidays. NTPC rose 2.2% andPower Grid Corp. was 0.9% higher. NLC India added 3.8% and Adani Energy Solutions was 3.1% higher. Nestle India was the best performer on the benchmark index, gaining 4.7%. Tech stocks weighed on the market, with Wipro down 1.4% and HCL Technologies dropping 1.1%. The benchmark Sensex gained 0.2% to end at 71437.19.


European stocks rose as equity traders took heart from more soft signals on global interest rates. "A dovish Bank of Japan has reinforced the cheery mood in global stock markets, resulting in further gains for indices this afternoon," IG analyst Chris Beauchamp wrote. The Stoxx Europe 600 gained 0.4%, the FTSE 100 advanced 0.3%, the CAC 40 edged 0.1% higher and the DAX rallied 0.6%. Gaming companies were among the biggest risers after a broker upgrade for Paddy Power owner Flutter Entertainment, which gained 3.5%. Still, Burberry fell 2% after brokerage Jefferies reportedly said its earnings guidance could be at risk if its product overhaul doesn't boost demand. Oil shares traded mixed despite a 2% rise in Brent crude to $79.52 a barrel.

The FTSE 100 Index closed Tuesday up 0.3% at 7638 points, in line with global peers and with most of the stocks in positive terrain. Online grocer Ocado led the index closing up 5.3%, followed by miners Fresnillo and Anglo American, up 3.9% and 3.85%, respectively. Flutter Entertainment shares rose 3.5% following a rating upgrade from Peel Hunt, ahead of its U.S. listing which is due to go live on Jan. 29, CMC Markets U.K. chief market analyst Michael Hewson says in a note.

North America

U.S. stocks extended their recent rally with the Dow Industrials ending at a record high for the fifth consecutive session.

The DJIA rose 251 points, or 0.7%, to 37557, the S&P 500 gained 0.6% to 4768 and the Nasdaq added 0.7% to 15003.

All eleven S&P 500 sectors finished in the green, led by energy, which gained 1.2% as oil price rose on worries about shipping disruptions in the Middle East.

Expectation of coming rate cuts in the new year put the major indexes in good shape for their eighth straight weekly gain. The dollar gained against the yen and fell against the euro as investors embraced risk.