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5 things to watch on the ASX on Wednesday

On Tuesday the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) continued its decline and fell 0.6% to 6,203.6 points due largely to heavy declines in the energy sector.

Will the market be able to bounce back on Wednesday? Here are five things that could have a say in today’s trade:

ASX futures pointing higher.

According to the latest SPI futures, the Australian share market is expected to open the day higher by almost 0.4% or 22 points. This follows a positive night of trade on Wall Street which saw the Dow Jones climb 0.2%, the S&P 500 rise 0.4%, and the Nasdaq push 0.6% higher to a record high.

Tech shares jump.

Australian tech shares such as Altium Limited (ASX: ALU) and Appen Ltd (ASX: APX) could reverse their recent declines on Wednesday after U.S. tech shares surged higher overnight. The Nasdaq reached an all-time high after Federal Reserve Chair Jerome Powell provided a positive outlook on the U.S. economy in his testimony before Congress.

Australian dollar falls.

Jerome Powell’s speech before Congress also led to the strengthening of the U.S. dollar and the widening of bond yields. This in turn has hit the Australian dollar and wiped out its recent gains. At the time of writing, the Aussie is down to 73.8 U.S. cents. This could give companies that generate meaningful revenues in the U.S. like Treasury Wine Estates Ltd (ASX: TWE) a lift today.

Oil prices slide.

Energy shares such as Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) weighed heavily on the market on Tuesday after oil prices sank lower. Unfortunately for shareholders of energy shares, oil prices have continued to weaken overnight. According to Bloomberg, the WTI crude oil price is down 0.7% to US$67.61 a barrel and the Brent crude oil price has dropped 0.2% to US$71.67 a barrel.

Mesoblast shares set to rise.

The Mesoblast Limited (ASX: MSB) share price looks set to surge higher on Wednesday after the innovative cell-based medicines developer announced that it has entered into a strategic alliance with China’s Tasly Pharmaceutical Group for the development, manufacture, and commercialisation of its MPC-150-IM and MPC-25-IC product candidates. The company’s US-listed shares surged 12.5% higher overnight.

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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 Altium and Appen Ltd. 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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