SYDNEY (Thomson Financial) - Australian shares are expected to open slightly lower Monday, with gains likely to be capped by weakness in the energy sector following a retreat in oil prices on Friday on expectations that OPEC will move to lift production when the cartel meets this week.
Gold stocks will also be under pressure following a retreat in the precious metal's price, but other miners should find support following gains in base metal prices on Friday.
The S&P/ASX 200 December futures contract ended its overnight session down 7 points at 6,561.0, suggesting a weak start to trading.
'We're looking at a slow Monday though the technicals are turning up - this was confirmed by Friday's gains on good volume,' said Stuart Smith, a private client advisor with Bell Potter Securities.
He expects the market to rally into Christmas with the key index, the S&P/ASX 200, likely to reach 6,700.
On Friday shares closed higher for the second session in a row after Federal Reserve chairman Ben Bernanke suggested another interest rate cut might be on the way, lifting market sentiment.
The S&P/ASX 200 closed up 88.6 points or 1.4 percent at 6,533.1. The benchmark index was up 202.9 points or 3.2 percent for the week. The All Ordinaries closed up 86.4 points or 1.3 percent at 6,593.6.
In New York, share prices closed higher after a volatile week and month. Investors took encouragement from Bernanke's remarks on Thursday, which were seen as suggesting the Fed will cut interest rates again at its December 11 meeting.
The Dow Jones Industrial Average rose 59.99 points or 0.5 percent to 13,371.72. For the week the index added 3.0 percent.
News Corp added 0.9 percent.
In London, share prices closed higher on Friday for the third straight day, buoyed by Wall Street extending its strong run. There was talk that Anglo-American would somehow be involved in the BHP Billiton-Rio Tinto saga.
The FTSE 100 ended up 83.4 points or 1.3 percent at 6,432.1.
BHP Billiton eased 0.7 percent while Rio Tinto rose 0.1 percent.
Oil prices retreated to below 90 US dollars a barrel on Friday on easing supply concerns and speculation that OPEC would opt to raise output at its meeting in Abu Dhabi this week.
The cartel, which is responsible for around a third of the world's oil output, is meeting to discuss its output quotas. OPEC has come under pressure from consuming nations to raise production to check soaring prices.
On Friday crude oil for January delivery fell 2.30 US dollars to settle at 88.71 dollars per barrel on the New York Mercantile Exchange. It was the lowest level in more than a month.
Gold prices retreated further last week from 27 year highs above 800 dollars an ounce reached early in November as the oil price fell back and the US dollar recovered from lows.
The metal's price also eased as investors switched out of safe haven investments such as gold. On Friday, February gold shed 13.20 dollars to 789.10 an ounce on the New York Mercantile Exchange.
Base metals rallied on Friday on hopes that the US economy would not fall into recession. Copper prices, which had been under pressure, rallied 1.8 percent on reports that stockpiles monitored by the Shanghai Futures Exchange had dropped 25 percent. Zinc rose 3.6 percent and lead climbed 2.0 percent.
Ahead in Australia today, October balance of payments data and third quarter company profits data will be released.
(1 US dollars = 1.13 Australian dollars)
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