Aussie stock market to open lower

The Australian stock market is tipped to open slightly lower on Monday following a weak lead from Wall Street, with caution the order of the day ahead of Tuesday's federal budget.

CommSec's chief equities economist Craig James predicts a 10- to 20-point fall in the stock market on Monday, but he says the strength of commodity prices will buoy the market.

"Oil prices continue to rise, we've got continued strength in base metal prices and gold prices," he said.

"So, in terms of the overall market, I think it can remain relatively resilient on Monday despite the fact that the Dow Jones was lower."

Mr James said recent strong banking results were reducing concerns of investors about the US sub-prime crisis and its impact on Australia.

"We will possibly see losses in the order of 10 to 20 points but I think investors are starting to dissect the differences between the US and the Australian market, particularly the strength that we're seeing in the bank profits here in Australia.

"It shows that the Australian banking system is in super strong shape."

Mr James said caution would be the order of the day ahead of Tuesday's federal budget.

"I don't think investors are going to get too carried away with market moves ahead of the budget."

On Wall Street on Friday, stocks fell as the price of oil set another record and concerns about the financial sector flared up again after American International Group Inc reported a massive loss.

The Dow Jones industrial average fell 120.90 points, or 0.94 per cent, to end at 12,745.88 and the Standard & Poor's 500 Index dropped 9.39 points, or 0.67 per cent, to finish at 1,388.28. The Nasdaq Composite Index slipped 5.72 points, or 0.23 per cent, to close at 2,445.52.

Locally, during Friday night trading on the Sydney Futures Exchange, the June share price index was 11 points lower at 5,755.

This week, the Australian Bureau of Statistics (ABS) housing finance data for March and the National Australia Bank Ltd business survey for April will be released on Monday.

The ABS labour price index data for March quarter is due out Wednesday.

On Thursday, Reserve Bank of Australia (RBA) governor Glenn Stevens addresses the Sydney University Faculty of Economics and Business dinner on The Australian Economy: Then and Now.

In equities, Harvey Norman Ltd third quarter sales results are out on Tuesday.

CSR Ltd full year results and Optus-owner Singapore Telecommunications Ltd fourth quarter results are due on Wednesday.

On Thursday, Leighton Holdings Ltd releases its third quarter results and on Friday Timbercorp Ltd interim results are due.