Australian shares are expected to advance when the sharemarket opens, after European shares rose in the first trading session of the year on Monday.The Australian dollar was flat at US68.10¢.World stocks inched higher, European bond yields dropped and the dollar held firm in light trading on Monday followingthat a third of the world will fall into recession this year.
The pan-regional STOXX 600 rose 1.0 per cent, supported by consumer discretionary stocks. The automobile and parts sector gained 3.2 per cent and luxury names such as LVMH and Kering added about 2 per cent each. An early indicator was data showing the downturn in eurozone manufacturing activity has probably passed its trough as supply chains begin to recover and inflationary pressures ease, leading to a rebound in hope among factory managers.
The STOXX 600 ended last year with sharp losses, driven by central banks’ aggressive policy tightening to rein in soaring prices, an economic slowdown, the Russia-Ukraine conflict that fanned inflationary pressures, and growing concerns over COVID-19 cases in China.Rate-sensitive technology stocks, among the worst-performing shares last year, rose 1.6 per cent on the day, despite more hawkish signals from the European Central Bank.