On Tuesday, the S&P/ASX 200 Index (ASX: XJO) began to bounce back from Monday’s sharp decline. The benchmark index rose by 0.4%, closing at 7,680.6 points. This initial recovery brings hope to investors, but can it sustain this momentum on Wednesday?
ASX 200 Expected to Fall
Despite the recovery, the Australian share market is expected to dip on Wednesday. According to the latest SPI futures, the ASX 200 is predicted to open 12 points or 0.15%, lower. This anticipated fall comes despite a robust performance in the United States, where the Dow Jones climbed 0.75%, the S&P 500 increased by 1%, and the Nasdaq also rose by 1%.
Rising Oil Prices
The energy sector on the ASX 200 might see some positive movement thanks to an uptick in oil prices. Overnight, WTI crude oil prices increased by 0.3% to US$73.18 a barrel, while Brent crude oil prices rose 0.2% to US$76.45 a barrel, according to Bloomberg. The price rise can result from heightened tensions in the Middle East, which have boosted oil prices. It could benefit energy shares such as Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS).
Pro Medicus: A Buying Opportunity
Shares of Pro Medicus Limited (ASX: PME) went down due to the recent market selloff. However, Goldman Sachs sees this as a buying opportunity. The broker restated its buy rating on Pro Medicus, with a price target of $148.00. It suggests a potential upside of 20% from current levels. Goldman Sachs highlighted that Pro Medicus is well-positioned heading into FY25, with the full-year benefits of large, high-profile contracts and an increasing frequency of new contract wins.
Figure 1: Last three months’ performance of ASX: PME (Pro Medicus Limited)
Gold Price Decline
Gold shares on the ASX 200, such as Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST), might face a challenging session after a drop in gold prices overnight. CNBC reported that the spot gold price fell by 0.6%, settling at US$2,429.7 an ounce. A stronger US dollar exerted pressure on the precious metal, which could lead to subdued performance for these gold stocks.
Telstra Shares: A Buy Before Results
Telstra Group Ltd (ASX: TLS) shares are recommended as a buy ahead of the telco giant’s full-year results. Analysts at Goldman Sachs have reaffirmed their buy rating with a price target of $4.30. They expect a solid set of FY24 results, driven by growth in the Mobile and InfraCo segments. Moreover, Goldman Sachs anticipates that Telstra will narrow or upgrade its FY25 EBITDA guidance range to A$8.5-8.7 billion, up from A$8.4-8.7 billion.
Wrapping Up!
While the ASX 200 showed signs of recovery on Tuesday, the market faces a mixed outlook. Rising oil prices could boost energy shares, but falling gold prices might dampen the performance of gold stocks. Pro Medicus presents a promising buy opportunity, and Telstra’s upcoming results could drive positive sentiment. However, the overall market is expected to open slightly lower, reflecting the complex interplay of global and domestic factors influencing the ASX 200. Investors will need to stay vigilant and responsive to these dynamic conditions
