On Tuesday, the S&P/ASX 200 Index (ASX: XJO) returned to form and pushed higher. The benchmark index rose 0.5% to 7,971.1 points.
Will the market be able to build on this on Wednesday? Here are five things to watch:
ASX 200 expected to edge higher
The Australian share market looks set to edge higher on Wednesday despite a poor session in the United States. According to the latest SPI futures, the ASX 200 is expected to open the day 12 points or 0.15% higher. On Wall Street, the Dow Jones was down 0.2%, the S&P 500 fell 0.2%, and the Nasdaq dropped 0.1%.
Oil prices fall
ASX 200 energy shares such as Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) could have a subdued session after oil prices dropped overnight. According to Bloomberg, the WTI crude oil price is down 1.35% to US$77.33 a barrel and the Brent crude oil price is down 1.2% to US$81.41 a barrel. Goldman Sachs notes that the oil price risk premium is nearly at zero after traders looked beyond Middle East tensions.
Pilbara Minerals Q4 update
Pilbara Minerals Ltd (ASX: PLS) shares will be on watch today when the lithium giant releases its fourth quarter update. According to a note out of Goldman Sachs, its analysts are forecasting production of 194,000dmt for the quarter. This will be a 10.2% increase quarter on quarter and a 19% increase on the prior corresponding period. The consensus estimate is for a smaller increase in production to 184,000dmt. Goldman also expects spodumene sales of 209,000dmt with a realised selling price of US$923 per tonne.
Gold price rises
ASX 200 gold shares such as Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could have a decent session after the gold price pushed higher overnight. According to CNBC, the spot gold price is up 0.6% to US$2,408.8 an ounce. Traders are continuing to bet on interest rates falling in the United States.
Buy Lynas shares
The Lynas Rare Earths Ltd (ASX: LYC) share price could be undervalued according to analysts at Goldman Sachs. In response to its quarterly update, the broker has reiterated its conviction buy rating with a trimmed price target of $7.00 (from $7.50). It said: "Undervalued: the stock is trading at ~0.8x NAV (A$7.73/sh) and pricing in ~US$65/kg NdPr vs. spot at ~US$53/kg and our long run US$83/kg (real $, from 2028) NdPr price forecast."
