On Wednesday, the S&P/ASX 200 Index (ASX: XJO) had a difficult day and dropped deep into the red. The benchmark index fell 0.85% to 7,229.4 points.
Will the market be able to build on this on Thursday? Here are five things to watch:
ASX 200 expected to fall
The Australian share market looks set to fall on Thursday following a subdued night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 18 points or 0.25% lower this morning. In late trade in the United States, the Dow Jones is down 0.05%, the S&P 500 has fallen 0.2% and the NASDAQ has tumbled 0.45%.
Oil prices continue to fall
Energy producers including Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have another tough day after oil prices dropped on Wednesday night. According to Bloomberg, the WTI crude oil price is down 2.75% to US$72.20 a barrel and the Brent crude oil price is down 2.5% to US$77.37 a barrel. Traders were selling oil after U.S. government data showed an unexpectedly large build in fuel stockpiles.
Wesfarmers rated as a sell
The Wesfarmers Ltd (ASX: WES) share price is overvalued according to analysts at Goldman Sachs. This morning, the broker has reiterated its sell rating with an improved price target of $40.60. The broker said: "We remain cautious on Kmart Group given softening discretionary spend, rising competition and elevated inventory but given other more prioritized investments in the group, a break-even outcome for Target is likely."
Gold price rebounds
Gold miners Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) could have a good day after the gold price rebounded overnight. According to CNBC, the spot gold price is up 1% to US$1,800.4 an ounce. Gold recovered after the US dollar and bond yields slipped.
Goldman names the ASX 200 lithium share to buy
Goldman Sachs has been looking at Australian lithium shares and has named the one to buy – Allkem Ltd (ASX: AKE). It said: "We prefer Allkem (Buy) with optionality across the Americas and Australia growing equity LCE production >4x by FY27E and at a discount to peers." The broker has a buy rating and $15.20 price target on its shares. It has put a sell rating on Core Lithium Ltd (ASX: CXO) shares.
