Updated March 27, 2018 08:23:14

Australian shares are expected to rise, following a rebound on Wall Street led by financials and technology stocks.

US markets surged over reports China and the US are willing to renegotiate tariffs and trade imbalances, calming down the market's fears of a potential trade war for now.

Signs of potential compromise were also supported by news South Korea would be exempt from US steel tariffs in a revision of the bilateral trade pact between the two countries.

Tech stocks boost Wall Street

Each of the three major indexes experienced their biggest one-day surge in 2.5 years.

The Dow Jones gained 2.8 per cent, or 669 points, to 24,203.

The S&P 500 lifted by 2.4 per cent, with every sector posting solid gains, while the Nasdaq jumped by 3.3 per cent.

Microsoft, in particular, has skyrocketed by 7.6 per cent, after investment bank Morgan Stanley said the tech company's total market value could hit $US1 trillion due to improved margins and its growth in cloud computing.

Last week's drop was fuelled in part by tensions surrounding US President Donald Trump's move to impose tariffs on up to $US60 billion worth of Chinese imports, in addition to those already levied on Chinese solar panels, steel and aluminium.

The Dow sank more than 1,000 points over the two days ending Friday, while the sell-off pushed the S&P 500 to within a hair of its 200-day moving average — a key level watched by market tacticians.

"Exemptions on steel [and] aluminium tariffs have already been granted for other important trade partners, which suggests US President is using this approach more for negotiating leverage rather than any real intention to start a global trade war," Accendo Markets head of research Mike van Dulken said.

He noted China's response so far was "measured" and "nuanced".

Australian market today

The Australian dollar rose 0.6 per cent to 77.45 US cents, and was steady against the British pound.

It also enjoyed a strong gain over the Japanese yen (+1.3pc), but has weakened against the euro (-0.2pc).

"The US dollar resumed its depreciation in overnight trade as fears over trade tariffs subsided," Commonwealth Bank's chief currency strategist Richard Grace said.

"It is possible, the coordinated multi-country action to expel Russian diplomats in response to the nerve agent attack in the UK assisted the sense that a serious and damaging trade war would not develop."

Topics: business-economics-and-finance, markets, stockmarket, currency, economic-trends, company-news, australia, united-states

First posted March 27, 2018 07:35:27