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Investors wait on Morrison for market cues

Australians will wait to see what Scott Morrison has to say on financial policy before investing their money, with an expected flat open to share market trading this week.

The market rallied late on Friday after a week of political turmoil ended with Mr Morrison taking the prime ministership via a leadership ballot victory over Peter Dutton in a result investors preferred.

The benchmark S&P/ASX200 closed 0.05 per cent higher, but down 1.5 per cent for the week as events in Canberra overshadowed the busiest week of reporting season to weigh on investor sentiment.

With no major domestic economic data expected until Thursday and futures trading flat despite strong closes by US and European markets, all eyes will be on the former treasurer to rally investors.

"I think Scott Morrison is seen as a sensible economic policy-maker. He's not seen as a populist, who's likely to do things which don't make economic sense," AMP Capital chief economist Shane Oliver told AAP.

"The last couple of budgets were generally taken well by financial markets."

But Dr Oliver warned of more politically-driven volatility.

"The flipside is the turmoil did unnerve markets and has got investors focused on the next election," he said.

"That uncertainty's going to linger for a while yet, I suspect, which may mean there's a bit of a cloud hanging over the share market sectors that we saw were vulnerable last week to a changing government, such as the banks."

Major Australian companies Boral and Harvey Norman are expected to paint contrasting pictures of the economy when they reveal their earnings results as reporting season winds down this week.

Building materials giant Boral is expected to report a "robust" profit given Australia's construction boom, Dr Oliver said.

"Harvey Norman will give some guidance to how consumers are going. It's a lot more difficult there," he said.

"They'll probably see a small rise but I'm not overly optimistic given the weakness we're seeing in consumer spending."

A small rise is expected in Thursday's business investment data, while building approval figures released on the same day are likely to have fallen.

Internationally, cues will include US data on house prices and consumer confidence, significant for interest rates, while a Chinese business survey will be scrutinised in Australia given the Asian powerhouse's slowing economy.

Austrlaian Associated PressBack to Breaking News

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