5 things to watch on the ASX 200 on Wednesday

On Tuesday, the S&P/ASX 200 Index (ASX: XJO) fought back from a very poor start to end the day only slightly lower. The benchmark index dropped 0.25% to 8,604.2 points.

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

ASX 200 to edge higher

The Australian share market looks set for a better day on Wednesday despite a mixed night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 9 points or 0.1% higher. In the United States, the Dow Jones rose 0.15%, but the S&P 500 fell 0.25% and the Nasdaq dropped 1%.

Oil prices tumble

ASX 200 energy shares Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a difficult session after oil prices tumbled overnight. According to Bloomberg, the WTI crude oil price is down 3.2% to US$88.31 a barrel and the Brent crude oil price is down 2.85% to US$91.54 a barrel. This was driven by news that traffic is increasing in the Strait of Hormuz.

Wesfarmers update

All eyes will be on Wesfarmers Ltd (ASX: WES) shares on Wednesday when the conglomerate holds its strategy briefing day event in Sydney. Ahead of the event, Morgans recently upgraded the Bunnings owner’s shares to an accumulate rating. It said: “In our view, WES remains a high-quality business with a healthy balance sheet and a proven management team. Amid ongoing geopolitical uncertainty and cost-of-living pressures, its retail divisions (Bunnings, Kmart Group, Officeworks, Priceline) are well-placed to grow due to their strong value propositions. A sustained improvement in lithium prices should also support earnings over the medium term.”

Gold price drops

ASX 200 gold shares such as Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) could have a poor session on Wednesday after the gold price dropped overnight. According to CNBC, the gold futures price is down 1.8% to US$4,282.9 an ounce. Traders were selling gold ahead of the release of US inflation data and on increasing rate hike bets.

TechnologyOne shares downgraded

Bell Potter is calling time on the TechnologyOne Ltd (ASX: TNE) share price rally. This morning, the broker has downgraded the enterprise software provider’s shares to a hold rating (from buy) with an improved price target of $34.25 (from $32.25). It said: “Our updated TP of $34.25 is <15% premium to the share price so we downgrade our recommendation to HOLD. We now see the stock as reasonable value on FY26 and FY27 PE ratios of 66x and 55x respectively. We do see Technology One as one of if not the best quality large cap SaaS company on the ASX but we note it is already trading at almost double the FY26 and FY27 PE ratios of WiseTech (ASX: WTC) on 35x and 28x.”

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

More reading

• Here are the top 10 ASX 200 shares today
• Here’s why the ASX 200 is falling despite a sea of green
• Why Aeris Resources, Northern Star, REA Group, and Weebit Nano shares are falling today
• Why are ASX 200 tech stocks like WiseTech, Life360 and Xero shares getting hammered on Tuesday?
• 3 ASX stocks I’d buy during a sharemarket crash

Motley Fool contributor James Mickleboro has positions in Technology One and WiseTech Global. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Technology One, Wesfarmers, and WiseTech Global. The Motley Fool Australia has positions in and has recommended WiseTech Global. The Motley Fool Australia has recommended Technology One and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.