On Monday, the S&P/ASX 200 Index (ASX: XJO) started the week in a positive fashion. The benchmark index rose 0.75% to 8,344.4 points.
Will the market be able to build on this on Tuesday? Here are five things to watch:
ASX 200 expected to fall
The Australian share market is expected to fall on Tuesday following a poor start to the week in the United States. According to the latest SPI futures, the ASX 200 is poised to open the day 73 points or 0.9% lower. In late trade on Wall Street, the Dow Jones is down 0.8%, the S&P 500 is down 0.3%, and the Nasdaq is flat.
Metcash shares downgraded
The Metcash Ltd (ASX: MTS) share price is overvalued according to analysts at Goldman Sachs. This morning, the broker has downgraded the wholesale distributor's shares to a sell rating with a reduced price target of $3.10 (from $3.80). The broker believes Metcash will underperform the market's expectations in the coming years. It said: "We cut our FY25E-27E group revenue by 1-2% and EBIT by 5-6% on lower Hardware corporate own/JV margins. Our FY24E-27E group revenue/EBIT CAGRs are 4.4%/6.9% and our FY25E-27E EBIT (ex-Horizon costs) are ~4% below FactSet consensus."
Oil prices rise
It could be a decent session for ASX 200 energy shares Santos Ltd (ASX: STO) and Karoon Energy Ltd (ASX: KAR) on Tuesday after oil prices rose overnight. According to Bloomberg, the WTI crude oil price is up 2.1% to US$70.67 a barrel and the Brent crude oil price is up 1.75% to US$74.33 a barrel. Oil prices rose after China cut its benchmark lending rate.
CSL R&D day
CSL Ltd (ASX: CSL) shares will be on watch on Tuesday when the biotechnology giant holds its highly anticipated research and development (R&D) day. At the event, the company will talk the market through its R&D pipeline, showing investors what is in the works to drive its future growth. Bell Potter described the event as a potential catalyst to driving its shares higher when it initiated coverage on the company yesterday with a buy rating and $345.00 price target.
Gold price edges higher
ASX 200 gold miners Gold Road Resources Ltd (ASX: GOR) and Regis Resources Limited (ASX: RRL) could have a relatively positive session after the gold price edged higher overnight. According to CNBC, the gold futures price is up 0.1% to US$2,732.3 an ounce. The gold price rally was held back by a stronger US dollar.
