5 things to watch on the ASX 200 on Wednesday

Here’s what to expect on the first day of the month…

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On Tuesday, the S&P/ASX 200 Index (ASX: XJO) was back on form and pushed higher. The benchmark index rose 0.2% to 7,256 points.

Will the market be able to build on this on Wednesday? Here are five things to watch:

ASX 200 expected to fall

The Australian share market looks set to give back yesterday’s gains on Wednesday amid a resurgence in Omicron fears. According to the latest SPI futures, the ASX 200 is expected to open the day 30 points or 0.4% lower this morning. In late trade in the United States, the Dow Jones is down 1.4%, the S&P 500 is down 1.3%, and the Nasdaq is trading 1.3% lower.

GUD shares to return

The GUD Holdings Limited (ASX: GUD) share price is expected to return to trade on Wednesday following the completion of the institutional component of its equity raising. The products company is raising a total of $405 million to fund the purchase of Autopacific Group for approximately $744.6 million. This deal is expected to be low double digit earnings per share accretive.

Oil prices tumble

Energy producers such as Beach Energy Ltd (ASX: BPT) and Woodside Petroleum Limited (ASX: WPL) could have a difficult day after oil prices tumbled. According to Bloomberg, the WTI crude oil price is down 5.8% to US$65.92 a barrel and the Brent crude oil price has fallen 4% to US$70.51 a barrel. Doubts about the efficacy of current vaccines on the Omicron variant spooked oil markets.

Gold price falls

Gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) will be on watch after the gold price dropped despite the market selloff. According to CNBC, the spot gold price is down 0.4% to US$1,778 an ounce. News that the US Fed will not let Omicron stop it from speeding up its bond-buying taper appears to have weighed on the precious metal.

GrainCorp downgraded

The Graincorp Ltd (ASX: GNC) share price could come under pressure on Wednesday. This morning the team at Bell Potter downgraded the grain exporter’s shares to a sell rating with a $6.15 price target. Its analysts believe GrainCorp’s earnings will peak in FY 2022 and then contract significantly next year.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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