On Tuesday, the S&P/ASX 200 Index (ASX: XJO) gave back its intraday gains to end the day in the red. The benchmark index fell 0.1% to 7,408.8 points.
Will the market be able to bounce back from this on Wednesday? Here are five things to watch:
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ASX 200 expected to sink
The Australian share market looks set to sink notably lower on Wednesday after Wall Street returned from the Martin Luther King Jr holiday in terrible form. According to the latest SPI futures, the ASX 200 is expected to open the day 74 points or 1% lower this morning. In late trade in the United States, the Dow Jones is down 1.4%, the S&P 500 is down 1.65%, and the Nasdaq is trading 2.2% lower. The latter does not bode well for tech shares on Wednesday.
Rio Tinto rated as a buy
The Rio Tinto Limited (ASX: RIO) share price is in the buy zone following its fourth quarter update according to analysts at Goldman Sachs. This morning the broker retained its buy rating and lifted its price target to $128.50. This recommendation is based on its attractive valuation, strong free cash flow, the positive iron ore outlook in 2022, and production growth potential.
Oil prices hit seven-year highs
Energy producers such as Beach Energy Ltd (ASX: BPT) and Woodside Petroleum Limited (ASX: WPL) could have another good day after oil prices stormed higher. According to Bloomberg, the WTI crude oil price is up 1.6% to US$85.15 a barrel and the Brent crude oil price has risen 0.9% to US$87.29 a barrel. Oil prices hit seven-year highs after an attack in the UAE caused regional tensions.
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 edged lower despite the market selloff. According to CNBC, the spot gold price is down 0.1% to US$1,815.20 an ounce. The gold price edged lower after traders became nervous ahead of another meeting by the US Federal Reserve next week.
Goodbye Afterpay shares
The Afterpay Ltd (ASX: APT) share price will stop trading on the Australian share market at the close of play today. It will then be absorbed by Block and replaced on the ASX with SQ2 shares. Unfortunately, it doesn't look likely to have a happy send off. The Block share price is down 1% in late trade on Wall Street.
