All eyes on interest rates

Published in the Daily Telegraph, March 2010

SHARES are likely to open moderately higher today after a better-than-expected February reporting season and renewed buoyancy on Wall Street and other world markets on Friday.

But investors will be cautious as the Reserve Bank of Australia is widely tipped to lift the official interest rate after its monthly board meeting tomorrow, while the latest economic growth figures will be released on Wednesday.

CommSec chief economist Craig James said he would be looking for gains of about 20 points at the start of trade today.

"The good news is the profit reporting is out of the road. It has been more positive than expected, and on Friday night European and US markets also finished higher," Mr James said. "We also had gains in terms of base metals, oil and gold, so it does set up a prospect of investors moving into the market and moving back to business."

The Dow Jones Industrial Average spluttered to a close on Friday rising just 4.23 points, or 0.04 per cent, to finish the week at 10,325.26 points.

This was after earlier struggling to make small gains as the market mulled over upwardly revised data on US economic growth and ongoing tensions over Greece's finances that weighed on the eurozone.

Earlier the local market had closed the week higher as most financial and resources stocks gave the bourse support. The benchmark S&P/ASX200 index closed up 43.6 points, or 0.95 per cent, to finish the week at 4637.7 points.

The broader All Ordinaries index added 36.2 points to finish up at 4651.1 points.

Wealth Within chief analyst Dale Gillham urged market players to be cautious.

"It is possible the yearly low that I have been expecting is still unfolding, therefore the market may fall for another two weeks to between 4300 and 4400 points," he said.