Australian Shares Set to Rise at Open

As the Australian share market prepares to open today, investors are bracing themselves for another potential record high, following a strong run of late. Several factors are driving this optimism, and we'll explore them in this article.

Firstly, the Australian market has been buoyed by the positive sentiment surrounding the US elections and the subsequent Trump + Red Sweep. This has led to a bump for several key S&P/ASX 200 index constituents, particularly those with substantial US earnings. Additionally, US fiscal policy is expected to be expansionary moving forward, which is generally considered positive for the global economy and the Australian share market.

Secondly, the Chinese government's announcement of initiatives to boost the economy, including measures to reverse the slide in property prices and alleviate the burden on heavily indebted local governments and property developers, is expected to benefit the Australian economy and global growth. This, in turn, is positive for the Australian share market.

Lastly, there is a growing feeling among economists and research analysts that we're in for a 'no landing' scenario, where the economic rebound from the COVID-19 pandemic largely continues despite central banks running higher interest rates to combat inflation. Further, rates are now generally being dialled down from restrictive settings in most economies, and this could help sustain global economic growth even further.



Morgan Stanley's 2025 Australia Macro+ Outlook report suggests that 2025 is expected to be another strong year for risk assets, with moderate growth and disinflation supporting elevated valuations. A focus on deregulation and ongoing easing by key central banks will provide additional tailwinds. However, the report also notes that markets will remain sensitive to the specifics, intensity, and timing of fiscal, trade, and immigration policies under the incoming US administration, as these factors could lead to varied investment outcomes.

In conclusion, the Australian share market appears poised for another strong day, driven by positive sentiment surrounding the US elections, Chinese stimulus measures, and the 'no landing' scenario. However, investors should remain vigilant and keep an eye on the specifics of fiscal, trade, and immigration policies under the incoming US administration, as these factors could impact market performance.