On Thursday, the S&P/ASX 200 Index (ASX: XJO) had a disappointing session and dropped into the red. The benchmark index fell 0.75% to 8,660.9 points.
Will the market be able to bounce back from this on Friday and end the week on a high? Here are five things to watch:
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ASX 200 expected to rise
The Australian share market looks set for a better session on Friday despite a mixed night of trade in the United States. According to the latest SPI futures, the ASX 200 is expected to open 19 points or 0.2% higher this morning. On Wall Street, the Dow Jones was up 0.1%, but the S&P 500 fell 0.45% and the Nasdaq dropped 1.25%.
Oil prices charge higher
ASX 200 energy shares including Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS)could have a good finish to the week after oil prices charged higher overnight. According to Bloomberg, the WTI crude oil price is up 2.75% to US$90.71 a barrel and the Brent crude oil price is up 3.15% to US$103.36 a barrel. This follows reports that Iran is stepping up attacks on tankers.
Fortescue shares downgraded
The Fortescue Ltd (ASX: FMG) share price could be heading lower even after hitting a new 52-week low on Thursday. This morning, Morgans has downgraded the iron ore giant's shares to a trim rating with a new price target of $15.40. It said: "We have long argued that investing material capital in near-term loss-making projects (magnetite and new energy) has not diversified Fortescue, and has instead left group earnings more exposed to the iron ore price. Magnetite adds more iron ore exposure but at a higher cost, while new energy investment, and US$0.9-1.3bn of FY27 decarbonisation spend, are funded from hematite cash flow. This dynamic is starting to show in the numbers. Fortescue flagged that net debt rose US$1.9bn in 1Q27, equal to the final dividend (US$1.0bn) plus quarterly capex (US$0.9bn), implying negative FCF for the quarter."
Gold price rises
ASX 200 gold shares including Evolution Mining Ltd (ASX: EVN) and Newmont Corporation (ASX: NEM) could have a decent finish to the week after the gold price rose overnight. According to CNBC, the gold futures price is up 0.45% to US$4,159.6 an ounce. The gold price rebounded from a two-month low as investors weighed the Federal Reserve's uncertain interest rate path.
Buy Mesoblast shares
Bell Potter thinks Mesoblast Ltd (ASX: MSB) shares are undervalued at current levels. This morning, the broker has retained its buy rating and $4.45 price target on the biotech company's shares. It said: "MSB remains an enigma for most Australian long only institutions, despite having achieved multiple clinical trial successes, product approvals and revenues likely to exceed US$200m in FY27. We expect this information gap will close over the coming year as the company delivers on additional wins in the clinic."
