SYDNEY (XFN-ASIA) - Share prices are expected to open lower after China's move on Saturday to lift interest rates to the highest level in eight years in a bid to cool the economy, dealers said.
Resources stocks are likely to be under pressure as higher Chinese interest rates may affect commodity prices including nickel which reached a fresh record high on Friday.
Dealers said Friday's retreat on Wall Street, after stronger-than-expected US inflation data for February was seen as reducing chances of interest rate cuts in the US this year, will also weigh on the market.
The S&P/ASX 200 June futures contract ended its last session up 3.0 points at 5,879.0.
On Friday, share prices ended down as investors remained cautious following volatility in global equity markets that prompted a heavy selloff in domestic stocks on Wednesday, followed by a sharp upward correction on Thursday.
The S&P/ASX 200 closed down 16.7 points or 0.29 pct at 5,836.3. The All Ordinaries index retreated 14.0 points to settle at 5,817.8.
In New York, the Dow Jones Industrial Average ended down 49.27 points or 0.41 pct at 12,110.41.
News Corp ended unchanged while National Australia Bank's American Depositary Receipts rose 0.07 pct.
In London, share prices closed lower as Wall Street retreated but merger and acquisition talk surrounding retailer Sainsbury, Unilever and Imperial Tobacco stemmed losses.
The FTSE 100 ended down 2.6 points or 0.04 pct at 6,130.6. BHP Billiton rose 0.14 pct while Rio Tinto eased 0.18 pct.
Oil prices slipped on Friday, weighed down by the front-month contract's expiration this week and the stock market's continued weakness, a possible harbinger of an economic slowdown. Light, sweet crude for April delivery fell 0.44 usd to settle at 57.11 usd a barrel on the New York Mercantile Exchange.
Gold and silver futures rose - with silver hitting a two-week high - largely in response to a sharply lower dollar as foreign exchange traders weighed up the Federal Reserves thinking on the risk of inflation versus slower growth. April gold settled up 6.80 usd at 653.90 usd on the New York Mercantile Exchange.
Base metal prices continued to be underpinned by supply constraints with nickel reaching another record high of 48,500 usd a metric ton on Friday. Copper was steady, finishing at 6,610 usd a ton, after significant gains on Thursday.
No major economic data are expected to be released in Australia.
(1 usd = 1.26 aud)
bruce.hextall@xfn.com
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