On Wednesday the S&P/ASX 200 Index (ASX: XJO) was out of form again and recorded a sizeable decline. The benchmark index fell 0.7% to 7,044.9 points.
Will the market be able to bounce back from this on Thursday? Here are five things to watch:
ASX 200 expected to fall
The Australian share market looks set to tumble lower again on Thursday following a selloff on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 33 points or 0.5% lower. In the United States, the Dow Jones fell 2%, the S&P 500 dropped 2.15%, and the Nasdaq sank 2.7%. A strong inflation reading spooked investors.
Xero full year results
All eyes will be on the Xero Limited (ASX: XRO) share price today. This morning the cloud-based business and accounting software platform provider will be releasing its full year results. According to a note out of Goldman Sachs, it is forecasting sales growth of 16% to NZ$836 million for the 12 months. Goldman expects this to be driven by a 16% increase in ANZ sales and a 17% lift in International sales. This compares to the market consensus estimate of NZ$854 million.
Oil prices rise
It could be a good day of trade for energy producers such as Oil Search Ltd (ASX: OSH) and Woodside Petroleum Limited (ASX: WPL) after oil prices strengthened. According to Bloomberg, the WTI crude oil price is up 0.85% to US$65.84 a barrel and the Brent crude oil price has risen 0.8% to US$69.09 a barrel. Oil prices rose on demand hopes.
Gold price sinks
Gold miners Evolution Mining Ltd (ASX: EVN) and Resolute Mining Limited (ASX: RSG) could come under pressure after the gold price sank lower overnight. According to CNBC, the spot gold price is down 1% to US$1,817.30 an ounce. The gold price tumbled after US inflation rose quicker than expected.
CBA rated as a sell
The Commonwealth Bank of Australia (ASX: CBA) share price is overvalued according to analysts at Goldman Sachs. In response to its third quarter update, the broker has retained its sell rating but lifted its price target by 9% to $80.26. While Goldman acknowledges that its operating performance was strong, it doesn’t believe it justifies the valuation premium.