On Monday, the S&P/ASX 200 Index (ASX: XJO) started the week with a disappointing decline. The benchmark index fell 0.6% to 8,295.1 points.
Will the market be able to bounce back from this on Tuesday? Here are five things to watch:
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ASX 200 expected to rebound
The Australian share market is expected to rebound on Tuesday following a solid start to the week in the United States. According to the latest SPI futures, the ASX 200 is poised to open the day 62 points or 0.75% higher. On Wall Street, the Dow Jones was up 0.3%, the S&P 500 rose 0.1%, and the Nasdaq edged higher.
RBA meeting
All eyes will be on the Reserve Bank of Australia (RBA) on Tuesday when it meets to decide on the cash rate. According to the latest cash rate futures, the market is pricing in a 96% probability of a 25 basis points cut to 3.85% this afternoon. The economics team at Westpac Banking Corp (ASX: WBC) agrees with the market. It said: "All measures of inflation are now firmly within the RBA's 2-3% target band. Policy settings are still weighing on the consumer, as evinced by pessimistic sentiment and slow growth in spending. As such, some further easing in these restrictive settings is warranted, particularly given the more unsettled and threatening global backdrop."
Oil prices edge higher
It could be a relatively positive session for ASX 200 energy shares Santos Ltd (ASX: STO) and Karoon Energy Ltd (ASX: KAR) after oil prices edged higher overnight. According to Bloomberg, the WTI crude oil price is up 0.3% to US$62.69 a barrel and the Brent crude oil price is up 0.1% to US$65.49 a barrel. A breakdown in U.S. talks with Iran over its nuclear program boosted prices.
Sell New Hope shares
New Hope Corporation Ltd (ASX: NHC) shares are a sell according to analysts at Goldman Sachs. In response to the coal miner's quarterly update, the broker has retained its sell rating with a slightly improved price target of $3.00. It said: "NHC is trading on a NTM EBITDA multiple of ~4.5x, broadly in-line with the global coal peer average of ~4.3x (median). However, NHC offers a lower TSR of negative ~2% vs. our sector average of ~16% based on our PT methodology and NTM dividend yield."
Gold price charges higher
ASX 200 gold shares Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) could have a good day on Tuesday after the gold price charged higher overnight. According to CNBC, the gold futures price is up 1.5% to US$3,234.9 an ounce. This was driven by demand for safe havens after Moody's downgraded the United States' credit rating.
