On Friday, the S&P/ASX 200 Index (ASX: XJO) finished a difficult week deep in the red. The benchmark index fell 1.75% to 6,474.8 points.

Will the market be able to bounce back from this on Monday? Here are five things to watch:

ASX 200 expected to fall

The Australian share market looks set to start the week in the red following a mixed night on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day 19 points or 0.3% lower this morning. On Wall Street, the Dow Jones was down 0.1%, the S&P 500 was up 0.2%, and the Nasdaq jumped 1.4%.

Oil prices sink

Energy producers Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) could have a very difficult start to the week after oil prices sank on Friday. According to Bloomberg, the WTI crude oil price dropped 6.8% to US$109.56 a barrel and the Brent crude oil price fell 5.6% to US$113.12 a barrel. This was driven by concerns that a potential global recession could weigh on demand.

ASX 200 rebalance takes effect

S&P Dow Jones Indices’ recently announced rebalance of the ASX 200 index will take effect today. Among the notable changes are Appen Ltd (ASX: APX) and PolyNovo Ltd (ASX: PNV) being kicked out of the index. Brainchip Holdings Ltd (ASX: BRN) and Core Lithium Ltd (ASX: CXO) are two of the new entrants to the benchmark index.

Gold price falls

Gold miners Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) could have a soft start to the week after the gold price dropped on Friday night. According to CNBC, the spot gold price is down 0.5% to US$1,840.6 an ounce. A stronger US dollar put pressure on the precious metal.

Allkem shares rated as a buy

The Allkem Ltd (ASX: AKE) share price could be great value after recent weakness according to Bell Potter. This morning the broker has retained its buy rating but trimmed its price target on the lithium producer’s shares to $17.53. This implies almost 80% upside for investors over the next 12 months. The broker said: “We expect AKE’s near term cash generation to lift substantially into 2023 as strength in lithium commodity indices flows through to lagged realised prices.”

The post 5 things to watch on the ASX 200 on Monday appeared first on The Motley Fool Australia.

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More reading

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Motley Fool contributor James Mickleboro has positions in Allkem Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Appen Ltd and POLYNOVO FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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