ASX set to follow Wall St higher as the Dow eyes record highs

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Australian shares are expected to start the day moderately higher as the Dow Jones industrial average edged towards an all-time high overnight.

ASX futures were up 0.2 per cent to 7,433 by 07:01am AEDT.

The Australian dollar was trading at 72.51 US cents, slightly higher than yesterday.

Major global stock indexes were mixed on Wednesday as uncertainty over the surge in Omicron variant infections tempered optimism that harsh new curbs on business and travel may not be needed.

After a weak session in Asian stock markets, European stock markets traded mixed.

The pan-European STOXX 600 slipped 0.1 per cent while the Dow edged toward an all-time high on strong US retail sales.

The Dow has risen six straight trading days, marking the longest streak of gains since a seven-session run from March 5 to March 15 of this year.

However, the S&P 500 the Nasdaq Composite edged lower.

Some early studies showing a reduced risk of hospitalisation in Omicron cases have eased concerns over the travel disruptions and powered the S&P 500 to record highs this week.

“The market started to recognise that the Omicron variant was in a strange way good news,” said Jay Hatfield, founder and chief executive of Infrastructure Capital Management in New York.

“It will burn itself out more rapidly because it’s easily transmissible, but it’s less likely to overwhelm overwhelmed the hospitals, even though arguably Omicron is going to be a headwind for at least the next month.”

While much of the economic optimism has centred on the United States, the main European stock index is up more than 16 per cent so far this year, showing faith in a recovery from the depths of the COVID-19 crisis.

The MSCI world equity index, which tracks shares in 50 countries, rose 0.01 per cent as it hovered close to a five-week high hit in the previous session.

Typically, the final five trading days of the year and the first two of the new year are seasonally strong for US stocks. But low holiday season trading volume exaggerated price moves.

US crude stocks, gasoline and distillate inventories fell last week, while US oil production rose to the highest since May 2020, Energy Information Administration data showed on Wednesday.

Brent crude oil was up, trading at $US79.17 a barrel, by 07:02am AEDT.

More to come.