On Wednesday, the S&P/ASX 200 Index (ASX: XJO) had another subdued session and dropped into the red. The benchmark index fell 0.25% to 8,687 points.
Will the market be able to bounce back from this on Thursday? Here are five things to watch:
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ASX 200 expected to sink
The Australian share market looks set for a tough session on Thursday following a mixed night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 63 points or 0.7% lower this morning. In the United States, the Dow Jones was down 0.6%, the S&P 500 edged 0.05% lower, and the Nasdaq rose slightly.
Hold Codan shares
Codan Ltd (ASX: CDA) shares are fairly valued after jumping 15% on Wednesday. This morning, the team at Bell Potter has put a hold rating and improved price target of $41.30 (from $37.70) on the technology company's shares. It said: "With relatively high levels of R&D spend strengthening CDA's competitive advantages across its businesses, CDA is well positioned to benefit from increased demand for mission-critical connectivity solutions in both defence and public safety markets. We believe CDA shares trade at fair value on 33x FY26 EV / EBIT amidst improving operating momentum and improving outlook in both segments."
Oil prices jump
ASX 200 energy shares Woodside Energy Group Ltd (ASX: WDS) and Santos Ltd (ASX: STO) could have a strong session on Thursday after oil prices surged overnight. According to Bloomberg, the WTI crude oil price is up 8.2% to US$108.12 a barrel and the Brent crude oil price is up 7.8% to US$119.93 a barrel. This was driven by news that Donald Trump plans to blockade Iran until it agrees to a nuclear deal.
Fortescue shares rated as a sell
Fortescue Ltd (ASX: FMG) shares are overvalued according to analysts at Bell Potter. This morning, the broker has downgraded the iron ore giant's shares to a sell rating with a reduced price target of $18.15. It said: "FMG's core iron ore operations continue to perform very well and benefit from an elevated iron ore price. However, we anticipate higher costs to emerge in 2HCY26 as low-cost inventories are exhausted, putting pressure on earnings. We are wary of the "portfolio optimisation" review encompassing Iron Bridge. We drop our rating to Sell."
Gold price drops
ASX 200 gold shares Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) could have a poor session on Thursday after the gold price dropped overnight. According to CNBC, the gold futures price is down 1.1% to US$4,557.6 an ounce. Traders appear to believe that soaring oil prices could lead to higher inflation and interest rate hikes.
