On Thursday the S&P/ASX 200 Index (ASX: XJO) returned to form and charged higher. The benchmark index climbed 0.6% to 5,955.5 points.
Will the market be able to build on this on Thursday? Here are five things to watch:
ASX 200 expected to slide.
Weakness on Wall Street overnight looks likely to weigh on the ASX 200 index on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day 0.5% or 28 points lower this morning. Overnight the Dow Jones sank 1.4%, the S&P 500 dropped 0.55%, and the Nasdaq defied the rest with a 0.5% gain.
Tech shares on watch.
It could be a good day of trade for Afterpay Ltd (ASX: APT) and other tech shares after their U.S. counterparts charged higher overnight. Investors were piling into tech shares again, leading to the Nasdaq index racing to a new record high. Tech behemoth Amazon was the star of the show, rising 3.3% to an all-time high. It now has a market capitalisation comfortably above US$1.5 trillion.
Oil prices sink.
Energy producers such as Oil Search Limited (ASX: OSH) and Santos Ltd (ASX: STO) are likely to come under pressure on Friday after a pullback in oil prices. According to Bloomberg, the WTI crude oil price has fallen 3.3% to US$39.54 a barrel and the Brent crude oil price dropped 2.2% to US$42.33 a barrel. Traders appear concerned that a spike in coronavirus cases could impact oil demand.
Gold price rally runs out of steam.
Gold miners Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) could end the week in a subdued fashion after the gold price softened. According to CNBC, the spot gold price fell 0.75% to US$1,807.30 an ounce. Investors appear to have been taking profit after some strong gains by the precious metal.
Evolution and Regis downgraded.
Also on watch today will be gold miners Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL). This morning analysts at Goldman Sachs downgraded their shares to sell ratings on valuation grounds. The broker has a $4.60 price target on Evolution shares and a $4.10 price target on Regis shares. This is notably lower than where their shares trade today.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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