SYDNEY (Thomson Financial) - Australian shares are expected to open higher Monday, though uncertainty is expected to permeate the stock market in a week that will end with Australians going to the polls to decide who will govern the country.
'The elections are certainly going to be a dominant factor with the outcome likely to be close,' said Stuart Smith, a private client advisor at Bell Potter Securities.
Polls indicate that Prime Minister John Howard's conservative government might lose the election on Saturday after 11 years in power. The Opposition Australian Labor Party, led by Kevin Rudd, is in a strong position to win government.
In the corporate world, attention will continue to focus on BHP Billiton's proposed merger with Rio Tinto, Smith said.
'At the moment this looks to be checkmate, so the process will continue for some time,' he said.
The overall market appears to be in a correction phase though direction will be dictated by US markets, he said.
The S&P/ASX 200 December futures contract ended its last session up 43 points at 6,546.0, suggesting a positive start to the week.
On Friday, share prices closed lower because of uncertainty about the direction of US markets.
The S&P/ASX 200 closed down 66.7 points or 1 percent at 6,461.9. For the week, the benchmark index was down 83.8 points or 1.3 percent.
The All Ordinaries was 68.3 points or 1 percent lower at 6,526.1.
In New York, share prices ended a volatile week with a late-day comeback Friday after investors set aside some concerns about the banking sector and the health of the overall economy.
The Dow Jones Industrial Average rose 66.74, or 0.51 percent, to 13,176.79.
News Corp ended up 0.2 percent.
In London, share prices ended the week lower with financial stocks weighing on the market because of fresh concerns over funding.
The FTSE 100 index was down 68.4 points or 1.1 percent at 6,291.2.
BHP Billiton rose 0.3 percent and Rio Tinto fell 0.7 percent.
Crude oil prices rose on Friday in response to forecasts of cold weather moving toward the US Northeast - the biggest heating oil market in the world. The December Nymex crude oil contract rose 1.67 US dollars to 95.10 dollars a barrel.
Base metal prices were generally lower on the London Metal Exchange on Friday with the exception of copper, which was up 1.5 percent. Lead lost 5.3 percent and zinc fell 2.6 percent.
Gold prices eased modestly on Friday as investors looked to lock in profits ahead of the weekend. The most-active December Comex gold quote rose 30 cents to 787.00 US dollars an ounce.
(1 US dollar = 1.12 Australian dollars)
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