Shares set for lower open

THE Australian share market looks set to open lower after Wall Street dipped on Wednesday as a sharp drop in energy stocks offset gains in other sectors.

At 0725 AEDT on Thursday, the share price futures index was down five points at 5,742.

The ADP National Employment report showed the U.S. private sector added 298,000 jobs last month, well above expectations calling for a 190,000 increase. The robust data sets the stage for Friday’s non-farm payrolls report, which includes private and public sector jobs and is seen as a barometer of the U.S. economy.

With a small chance of a weak payrolls report, the U.S. Federal Reserve is more likely to raise rates at its meeting next week.

The energy sector, down 2.1 per cent, weighed as oil prices tumbled more than 5 per cent in the wake of a much stronger-than-expected rise in U.S. inventories. Locally, no major economic or equities news is expected on Thursday.

The Australian share market closed relatively steady on Wednesday after stronger-than-expected Chinese drove a recovery from early losses. The benchmark S&P/ASX200 dropped 1.7 points, or 0.03 per cent, to 5,759.7 points, while the broader All Ordinaries index lost 2.4 points, or 0.04 per cent, to 5,799.5 points.

Meanwhile, the Australian dollar has slipped against its US counterpart, which lifted as strong US payrolls data underlined expectations of a lift in US interest rates.

The local currency was trading at 75.36 US cents at 0725 AEDT on Thursday, down from 75.95 US cents on Wednesday.