Australian shares are expected to rise amid hopes of a US interest rate cut at a traditionally strong time for stocks, dealers said Friday. After six weeks of losses, the week to November 30 saw the benchmark index finally regaining lost ground.
The key S&P/ASX 200 index gained 202.9 points or 3.2 percent over the week to end it at 6,533.1. AMP Capital Investors chief economist Shane Oliver said hopes of a US interest rate cut come at a good time of year for shares and that there was also scope for a recovery after an "excessively bearish" few weeks.
Shares are likely to rally further into the end of the year on the back of reasonably attractive valuations, prospects for further Fed monetary easing and positive seasonal forces, he said.
However, the Australian share market is likely to prove a relative outperformer due to stronger banks and Australia's exposure to strong growth in China and Asia generally, he said.
The Reserve Bank of Australia is expected to leave interest rates on hold following its regular board meeting next week. Data for the balance of trade, retail sales and economic growth are also due out.
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