On Monday the benchmark S&P/ASX 200 index started the week on a very disappointing note, falling 0.8% to 6,283.7 points.
Will the market be able to bounce back on Tuesday? Here are five things to watch:
ASX futures pointing higher.
The Australian share market looks set to rebound strongly from yesterday’s sell off after trade war tensions eased. According to the latest SPI futures, the ASX 200 is poised to open the day 41 points or 0.65% higher this morning following an eventful night of trade on Wall Street. Although the Dow Jones fell 0.25%, the S&P 500 dropped 0.45%, and the Nasdaq tumbled 0.5%, the three indices were down significantly more in early trade.
Reserve Bank meeting.
This afternoon the Reserve Bank of Australia will meet to decide on the cash rate. According to the latest ASX 30 Day Interbank Cash Rate Futures contracts, there is a 49% probability of the central bank cutting the cash rate by 25 basis points to 1.25% on Tuesday. If rates go lower then demand for so-called bond proxies Sydney Airport Holdings Pty Ltd (ASX: SYD) and Transurban Group (ASX: TCL) could increase.
CIMIC shares on watch again.
The CIMIC Group Ltd (ASX: CIM) share price will be on watch on Tuesday after the engineering company was targeted by a Hong Kong-based short seller. According to a note out of GMT Research, its analysts allege that CIMIC has inflated its profits and disguised its poor performance by engineering its accounts in order to boost its share price. The company has not yet responded to the allegations.
Oil prices charge higher.
The shares of energy producers such as Oil Search Limited (ASX: OSH) and Woodside Petroleum Limited (ASX: WPL) could push higher on Tuesday after oil prices rose strongly overnight. According to Bloomberg, the WTI crude oil price climbed 1.3% to US$62.77 a barrel and the Brent crude oil price pushed 1.1% higher to US$71.61 a barrel.
Westpac shares on watch.
All eyes will be on the Westpac Banking Corp (ASX: WBC) share price again this morning after brokers had chance to absorb the banking giant’s half year results. One broker that wasn’t overly impressed was Goldman Sachs. According to a note out of the investment bank, its analysts felt the quality of the result was soft and have retained their neutral rating and revised the price target on its shares to $29.12.
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Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of and has recommended Sydney Airport Holdings Limited and Transurban Group. 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.