Cautious sentiment is seen getting a grip at the start of the Australian stock market trading on Monday after Friday's disappointing leads from the U.S. and European stocks markets.

Analysts are quick to point out that the market rebound was unable to be sustained on Friday as stocks world-wide drifted lower during the closing.

CMC Markets chief analyst Mr Ric Spooner shares that with no major economics data releases or relevant company news data stocks failed to recover mid-day losses. The Dow Jones Industrial Average lost 2.73 points to finish at 12977.5.

IG Markets strategist Mr Stan Shamu adds that the risk appetite among investors had been subdued by profit-taking with the recent development in Spain raising more skepticism on the EU.

"Spain's budget proposition resulted in renewed euro-scepticism as it undermined the credibility of the EU and its agreements on rescue packages for Greece and other eurozone nations. This saw money flow out of risk currencies and into the US dollar. The stronger US dollar weighed on commodity and equity prices. As a result, we are likely to see weakness in the resource space at the open," Mr. Shamu notes.

Mr. Spooner notes that the important leads this week will be February employment data. Continuing the positive growth in the job markets of Australia and the U.S. in February will significantly boost consumer confidence and spending.

Another important lead, according to Mr Shamu is the lending growth reported by China's four biggest banks rising about $3.2 billion in the first two months of 2012 from a year earlier. This, he said, might give some upside to risk assets this morning.

IG MARKETS CHART

Market

Price at 8:30am AEST

Change Since Australian Market Close

Percentage Change

AUD/USD

1.0731

-0.0064

-0.59%

ASX (cash)

4258

-15

-0.35%

US DOW (cash)

12991

-7

-0.05%

US S&P (cash)

1370.0

-6

-0.44%

UK FTSE (cash)

5907.0

-27

-0.46%

German DAX (cash)

6925.0

-6

-0.09%

Japan 225 (cash)

9805

28

0.29%

Rio Tinto Plc (London)

35.60

-0.35

-0.97%

BHP Billiton Plc (London)

20.31

-0.16

-0.78%

BHP Billiton Ltd. ADR (US) (AUD)

35.41

-0.28

-0.78%

US Light Crude Oil (Apr)

106.50

-2.09

-1.92%

Gold (spot)

1712.0

-10.0

-0.58%

Aluminium (London)

2328.00

-25

-1.06%

Copper (London)

8580.00

-49

-0.57%

Nickel (London)

19475.00

-20

-0.10%

Zinc (London)

2120.00

15

0.71%

RBA Cash Rate to be decreased by 25bp (Mar) (%)

13.00

0

0.00%

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