On Monday the S&P/ASX 200 Index (ASX: XJO) started the year on a high and recorded a very strong gain. The benchmark index rose 1.5% to 6,684.2 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 looks set to drop lower on Tuesday. According to the latest SPI futures, the ASX 200 is poised to open the day 27 points or 0.4% lower this morning. This follows a very poor start to the week on Wall Street. In late trade the Dow Jones is down 1.6%, the S&P 500 is down 1.65%, and the Nasdaq has fallen 1.7%.
Tech shares on watch.
It could be a difficult day for tech shares such as Afterpay Ltd (ASX: APT) and Xero Limited (ASX: XRO) after their US counterparts sank lower overnight. The Australian tech sector has a tendency to follow the lead of the tech-focused Nasdaq index, which is trading 1.7% lower in late trade on Wall Street. Concerns that a correction could be coming appears to be weighing on US stocks.
Oil prices tumble.
Energy producers including Beach Energy Ltd (ASX: BPT) and Woodside Petroleum Limited (ASX: WPL) could come under pressure today after oil prices sank lower. According to Bloomberg, the WTI crude oil price is down 1.6% to US$47.77 a barrel and the Brent crude oil price has fallen 1.3% to US$51.13 a barrel. Rising COVID-19 cases has fuelled demand concerns.
Gold price jumps.
Gold miners such as Newcrest Mining Limited (ASX: NCM) and St Barbara Ltd (ASX: SBM) could have a very strong day after the gold price jumped. According to CNBC, the spot gold price has risen 2.7% to US$1,945.80 an ounce. This follows a selloff on Wall Street and weakness in the US dollar.
Iron ore price rises.
Also rising strongly on Monday was the iron ore price, which could be supportive of BHP Group Ltd (ASX: BHP) and Fortescue Metals Group Limited (ASX: FMG) shares on Tuesday. According to Metal Bulletin, the iron ore price has risen a sizeable 3% to US$165.29 a tonne.
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More reading
- ASX 200 rises 1.5%
- The top performing ASX 200 tech shares of 2020
- Is it better to buy 2020’s best or worst ASX shares?
- Why the AGL Energy (ASX:AGL) share price is climbing today
- Will the Fortescue (ASX:FMG) share price double again in 2021?
James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
The post 5 things to watch on the ASX 200 on Tuesday appeared first on The Motley Fool Australia.
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