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5 things to watch on the ASX on Thursday

On Tuesday the benchmark S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) stormed 0.6% higher to 5,921.6 points. Solid gains in the banking sector helped offset declines in the resources sector after commodity prices gave back some of their recent gains.

Will the market be able to build on this gain on Thursday?

ASX futures pointing higher.

According to the latest SPI futures, the ASX is poised to open the day 0.7% or 41 points higher on Thursday. Surprisingly, this gain comes despite heavy declines on Wall Street overnight on Tuesday after Treasury yields broke through the 3% mark. An impressively strong quarterly result by global giant Caterpillar, often regarded as a bellwether for the global economy, appears to have caught the attention of investors. This led to the U.S market bouncing back on Wednesday, with the Dow Jones up 0.2%, the S&P 500 0.2% higher, and the NASDAQ ending flat.

Healthscope tipped as a takeover target.

The Healthscope Ltd (ASX: HSO) share price will be on watch on Thursday after further speculation that the private hospital operator is a takeover target emerged. According to the AFR, private equity firm BGH Capital is understood to be preparing a $6 billion bid for Australia’s second biggest private hospital operator. This would imply a 25% premium to its last close price.

Seven Group and Wesfarmers will be on watch.

The Seven Group Holdings Ltd (ASX: SVW) share price could have a positive day of trade following the release of Caterpillar’s impressive quarterly result. The company’s WesTrac business is one of the largest authorised Caterpillar dealers in the world. A strong quarter from the heavy machinery maker led to it lifting its full-year earnings outlook significantly. In addition to Seven, Wesfarmers Ltd (ASX: WES) could be on the move today after releasing its latest quarterly update.

The Australian dollar continues to tumble.

The Australian dollar has dropped lower again versus the U.S. dollar. The local currency is now fetching 75.6 U.S. cents, down 0.5% over the last 24 hours and 3% since this time last week. Rising bond yields in the United States appear to have led to the U.S. dollar finding strength. This could be good news for the likes of CSL Limited (ASX: CSL) and Treasury Wine Estates Ltd (ASX: TWE) which could benefit from favourable currency movements.

Bank of Queensland shares go ex-dividend.

The Bank of Queensland Limited (ASX: BOQ) share price is likely to sink lower on Thursday after it goes ex-dividend for the regional bank’s interim fully franked 38 cents per share dividend. Eligible shareholders can then look forward to receiving it in their nominated accounts on May 17. Elsewhere, eligible HT&E Ltd (ASX: HT1) shareholders can expect to receive their fully franked 4 cents per share dividend in their accounts this morning.

Shares to watch in 2018.

These three mid cap shares could be worth watching very closely over the coming months. I'm tipping them to shine in 2018 and beyond.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Wesfarmers Limited. The Motley Fool Australia has recommended Treasury Wine Estates Limited. 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 Scott Phillips.

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