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Market set for negative open
Market set for negative open

UPDATE 8.05am: The Australian sharemarket opened lower as investors waited for signs that the US would be able to avoid the looming fiscal cliff.

At 7.20am, the benchmark S&P/ASX200 index was down 18.22 points, or 0.41 per cent, at 4443.8 points, while the broader All Ordinaries index had fallen 16.96 points, or 0.38 per cent, to 4465.5 points.

On the ASX 24, the December share price index futures contract was 24 points lower at 4460 points, on volume of 8150 contracts.

IG Markets analyst Cameron Peacock said local investors were pausing to digest last week's economic news, causing the market to open lower.

“We didn't get the interest rate cut that we thought we'd get last week and then we had the US presidential elections,” he said.

He said he expected the market to remain volatile until there was more guidance from the US on how it would avoid the fiscal cliff.

The fiscal cliff is a term used to describe a raft of tax measures and cost reductions that will automatically come into effect to avoid a massive deficit blow-out.

US stocks closed slightly higher on Friday after upbeat consumer confidence data shaved an edge off economic fears.

The Dow Jones Industrial Average closed up a mere 4.07 points, or 0.03 per cent, at 12,815.39.

European stock markets steadied on Friday and the euro dropped against the US dollar after a week dominated by rising concerns about the economic outlook for both the United States and the euro zone.

London's FTSE 100 index of top companies dipped 0.11 per cent to 5,769.68 points at closing, and Frankfurt's DAX 30 gave up 0.58 per cent to 7,163.5 points, while in Paris the CAC 40 rose 0.47 per cent to 3,423.57 points.

Locally BHP Billiton opened 20 cents lower at $34.26, Rio Tinto dropped 22 cents to $58.47 and Fortescue fell three cents to $3.90.

Insurance giant QBE expects its losses from superstorm Sandy in the United States to be up to $US450 million ($A434.85 million).

QBE shares fell $1.63, or 12.67 per cent, to $11.24.

National turnover was 212.8 million securities worth $397.4 million, with 234 stocks trading up, 263 down and 254 unchanged.