On Wednesday the S&P/ASX 200 index followed the lead of U.S. markets and sank lower. The benchmark index dropped 1.5% to 6,639.9 points.
Will the local share market be able to bounce back from this on Thursday? Here are five things to watch:
ASX 200 expected to crash lower.
It looks set to be another very disappointing day of trade for the Australian share market after global markets were sold off overnight. According to the latest SPI futures, the ASX 200 is poised to sink 121 points or 1.8% at the open after the U.S. revealed plans for EU tariffs. On Wall Street the Dow Jones fell 1.9%, the S&P 500 dropped 1.8%, and the Nasdaq index fell 1.6%.
European tariffs
Investors around the globe were hitting the sell button overnight after the U.S. revealed plans to impose tariffs on European Union goods including aircraft and agricultural products. This follows news that the WTO gave the Trump administration the right to put tariffs on US$7.5 billion in European goods. The U.S. had lodged complaints as far back as 2004, over what it called illegal subsidies for aircraft maker Airbus by several European governments.
Oil prices sink again.
Energy producers such as Beach Energy Ltd (ASX: BPT) and Oil Search Limited (ASX: OSH) are likely to tumble lower today after oil prices continued to weaken. According to Bloomberg, the WTI crude oil price fell 2.1% to US$52.51 a barrel and the Brent crude oil price dropped 2.35% to US$57.51 a barrel.
Gold price pushes higher.
The global market selloff looks set to send Australian gold miners including Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) higher on Thursday. With markets deep in the red, increased demand for safe haven assets sent the gold price charging higher. According to CNBC, the spot gold price rose 1.15% to US$1,506.10 an ounce.
NAB remains a buy.
Despite its larger than expected remediation charges, Goldman Sachs continues to rate National Australia Bank Ltd (ASX: NAB) shares as a buy and has even kept them on its conviction list. The broker has trimmed its price target slightly to $30.40.
