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ASX 200 set to rise again: 10 shares to watch

The local S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) soared 2% on Monday and looks set to open another 0.5% higher this morning, with the Sydney Futures Exchange pointing to a 26-point lift at the open.

Here’s a quick recap:

  • FTSE 100 (UK): up 1.4%
  • DAX (Germany): up 2.12%
  • CAC 40 (France): up 1.76%
  • Dow Jones (USA): up 0.44%
  • NASDAQ (USA): up 0.64%

European shares surged higher again overnight while it was a historic night on Wall Street as well. The S&P 500 reached an all-time high, more than reversing any falls related to fears of Brexit or slipping oil prices that have dragged it lower this year.

Local investors will hope for another solid session from BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO) after their London-listed shares climbed strongly yesterday evening. In saying that, oil prices have retreated to US$46 a barrel which could weigh on sentiment across the energy sector.

The gold sector will likely also be in focus, particularly after Canaccord Genuity revised its target prices on many shares in the industry. Shares of miners such as EVOLUTION FPO (ASX: EVN), St Barbara Ltd (ASX: SBM) and Beadell Resources Ltd (ASX: BDR) have skyrocketed in recent times, but could come under pressure if or when more confidence returns to the market.

Based on Canaccord’s target prices, some of the shares in the sector may already be fairly priced, while it shows that others may have become overvalued.

Notably, Canaccord Genuity also raised its target price on honey maker Capilano Honey Ltd (ASX: CZZ) which could generate some interest in the shares today.

Fellow broker UBS has also been busy. It cut its target price on Primary Health Care Limited (ASX: PRY) following yesterday’s earnings downgrade, and increased its target on Sirtex Medical Limited (ASX: SRX) to $44 after its positive sales report.

It’s also worth keeping an eye on the banks today. Australia and New Zealand Banking Group (ASX: ANZ) and Westpac Banking Corp (ASX: WBC) generated particularly strong gains on Monday and could have further to rise based on heightened expectations of an official interest rate cut in August.

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Motley Fool contributor Ryan Newman has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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