SYDNEY (Thomson Financial) - Australian shares are expected to open higher Monday following strong gains on Wall Street on Friday, while sentiment will also be helped by an end to political uncertainty in Australia following Saturday's federal elections.
The Australian Labor Party, led by Kevin Rudd, had a decisive win and will replace Prime John Howard's conservative government which had been power for more than 11 years.
'The market should not be troubled by a change in government - it really has been a foregone conclusion so let's see what the first 100 days brings,' said Stuart Smith, a private client advisor at Bell Potter Securities.
'The Labor Party has always been a great builder so we will see positives for infrastructure, building and construction.'
The S&P/ASX 200 December futures contract ended its last session up 86 points at 6,440, indicating a solid start to trading.
On Friday, shares closed a thin session lower as the major banking and resources stocks led the market lower for the sixth week in a row.
The S&P/ASX 200 closed 4.1 points or 0.1 percent lower at 6,330.2. For the week, the benchmark index was down 131.7 points or 2 percent. The All Ordinaries closed down 2.7 points or 0.04 percent at 6,392.4.
The Australian dollar rose sharply against the US dollar this morning following the end of election-related uncertainty. The currency rose as high as 88.40 US cents this morning from Friday's close of 87.75 cents.
In New York, share prices posted strong gains in an abbreviated session on Friday as optimism about holiday-related shopping boosted retail stocks. Shares in Wal-Mart gained 1.9 percent.
A new plan to ease credit market strains on banks lifted financial stocks.
The Dow Jones Industrial Average ended up 181.84 points or 1.4 percent at 12,980.88.
News Corp ended up 1.1 percent.
In London, shares closed higher with mining stocks making solid gains on merger and acquisition talk as well as a lift in commodity prices.
BHP Billiton surged 5.3 percent and Rio Tinto jumped 7.9 percent.
Base metal prices were higher on the London Metal Exchange on Friday. Declines in copper inventories in Shanghai and firm equities markets buoyed sentiment on commodities. Copper rose 2.3 percent and lead gained 3.1 percent.
Gold prices posted their strongest one-day percentage gain since February as investors again embraced commodities. The most-active December Comex gold price gained 26.10 US dollars or 3.3 percent to 824.70 dollars per ounce.
US light crude oil rose on Friday to the highest settlement price on record. Oil rose in response to colder weather in the US north-east but was restrained to some extent by a firmer US dollar. The January Nymex crude oil contract rose 89 cents to 98.18 dollars a barrel.
(1 US dollar = 1.13 Australian dollars)
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