5 things to watch on the ASX on Tuesday

On Monday the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) started the week on a high and finished the day 0.2% higher at 6,104.1 points thanks partly to gains in the banking sector.

Will the local market be able to build on this on Tuesday? Here are five things that could shape today’s trade:

ASX futures are pointing higher.

According to the latest SPI futures, the Australian share market is expected to open the day higher by a sizeable 0.6% or 35 points despite a weak night of trade on Wall Street. The Dow Jones Industrial Average started the week with a decline of 0.4%, the S&P 500 was down 0.2%, and the NASDAQ edged a fraction higher.

Oil prices have rebounded.

Australia’s energy producers could be set for a positive day of trade after oil prices rebounded. According to Bloomberg, WTI crude oil rose 1.2% to US$65.83 a barrel and Brent crude oil was 2.6% higher at US$75.37 a barrel.

CYBG and Virgin Money come to an agreement.

An announcement after the market closed from CYBG PLC (ASX: CYB) reveals that the UK-based bank and Virgin Money have agreed the terms of a recommended all-share offer to be made by CYBG for its rival. The two boards believe the agreement will create the UK’s first true national banking competitor to the status quo. Under the terms of the offer, Virgin Money shareholders will receive 1.2125 new CYBG shares in exchange for each Virgin Money share.

Syrah Resources downgrades production guidance.

Australia’s most shorted share, Syrah Resources Ltd (ASX: SYR), may have given short sellers a reason to smile on Tuesday. After the market closed on Monday the graphite miner released an update on production at its Balama project in Mozambique. According to the release, graphite recovery and production volumes have been impacted by the inconsistent performance of the flotation level sensors. As a result, the company expects to produce between 32,000 and 34,000 tonnes of graphite concentrate in the first half, compared to its guidance of 40,000 tonnes.

ELMO pulls the plug on an acquisition.

On Monday evening fast-growing technology company ELMO Software Ltd (ASX: ELO) released an announcement relating to a potential acquisition. After conducting due diligence on the business, the board have decided that it does meet its demanding acquisition criteria. As a result, the board has taken the decision to withdraw from the process and the acquisition will not proceed. Part of the $40 million ELMO raised in March was due to go towards the acquisition.

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