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On Tuesday, the S&P/ASX 200 Index (ASX: XJO) had another poor session and dropped into the red. The benchmark index fell 0.4% to 7,718.2 points.
Will the market be able to bounce back from this on Wednesday? Here are five things to watch:
ASX 200 expected to rebound
It looks set to be a good day for the Australian share market on Wednesday after a positive session in the United States. According to the latest SPI futures, the ASX 200 is expected to open the day 20 points or 0.25% higher. On Wall Street, the Dow Jones was up 0.4%, the S&P 500 pushed 0.6% higher, and the Nasdaq climbed 0.85%.
Oil prices fall
ASX 200 energy shares Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) could have a poor session after oil prices dropped overnight. According to Bloomberg, the WTI crude oil price is down 0.4% to US$83.04 a barrel and the Brent crude oil price is down 0.15% to US$86.47 a barrel. This may have been driven by profit taking after oil hit a two-month high.
Buy Liontown shares
The Liontown Resources Ltd (ASX: LTR) share price is undervalued according to analysts at Bell Potter. In response to its funding news, the broker has retained its speculative buy rating and $1.85 price target on the lithium developer’s shares. It said: “The LG CN funding is a pragmatic solution to remove the onerous terms associated with traditional bank debt and increase the company’s cash liquidity headroom. […] Under our modelled assumptions, we expect that LTR is fully funded to free cash flow.”
Gold price relatively flat
ASX 200 gold shares Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) will be on watch following a flat night for the gold price. According to CNBC, the spot gold price is up a fraction to US$2,339.5 an ounce. This follows an update from the US Federal Reserve which revealed that it isn’t ready to cut rates yet.
BHP rated as a buy
Analysts at Goldman Sachs think BHP Group Ltd (ASX: BHP) shares would be a good option for investors. This morning, the broker has reaffirmed its buy rating and $48.40 price target on the mining giant’s shares. Goldman notes that BHP’s shares have an “attractive valuation, but at a premium to RIO. Although we believe this premium can be partly maintained due to ongoing superior margins and operating performance.”