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5 things to watch on the ASX 200 on Thursday

On Wednesday the S&P/ASX 200 Index (ASX: XJO) gave back Tuesday’s gains and dropped notably lower. The benchmark index fell 6.4% to 4,953.2 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 fall.    

The S&P/ASX 200 Index looks set to extend its losses on Thursday after another selloff on Wall Street. According to the latest SPI futures, the benchmark index is expected to open the day 164 points or 3.4% lower this morning. In late on Wall Street the Dow Jones is down 7.8%, the S&P 500 is 6.9% lower, and the Nasdaq index is down 6.2%.

Reserve Bank to cut rates.

The Reserve Bank is widely expected to make an emergency cut to the cash rate and bring it down to a record low of 0.25% today. The central bank is also likely to launch a quantitative easing package worth an estimated $50 billion. This will consist of four-year government bonds purchases.

Oil prices crash lower.

It could be another bad day of trade for energy producers including Oil Search Limited (ASX: OSH) and Santos Ltd (ASX: STO). Overnight oil prices crashed significantly lower amid concerns over falling demand and the price war. According to Bloomberg, the WTI crude oil price is down 18.4% to US$22.00 a barrel and the Brent crude oil price has fallen 9.9% to US$25.88 a barrel.

Gold price sinks.

Gold miners including Northern Star Resources Ltd (ASX: NST) and Saracen Mineral Holdings Limited (ASX: SAR) were on fire on Wednesday. But they may give back some of their strong gains after the gold price sank lower overnight. According to CNBC, the spot gold price is down 2.1% to US$1,493.7 an ounce. Concerns over the coronavirus has sent many investors to cash.

Telstra rated as a buy.

The Telstra Corporation Ltd (ASX: TLS) share price will be on watch on Thursday after analysts at Goldman Sachs reiterated their conviction buy rating and $4.20 price target. Telstra is the broker’s top pick in the telco sector. It explained: “In an uncertain macroeconomic environment, we like the defensive and recurring nature of telco earnings.”

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As of 17/3/20

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra 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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