ASX 200 Exoected to Edge Lower as Oil Increases and Tech Stocks Stay in Focus
Synopsis
The ASX 200 is expected to open slightly lower on Wednesday following a mixed session on Wall Street and ongoing volatility in oil markets. Investors are closely watching energy stocks after oil prices swung sharply amid renewed US-Iran tensions. Broker updates also placed several major Australian companies in focus, including Goodman Group and Life360, both of which retained buy ratings from Bell Potter. Meanwhile, softer gold prices may pressure leading ASX gold miners as markets continue monitoring inflation risks, interest rate expectations and broader global economic uncertainty.
The ASX 200 is anticipated to open just lower on Wednesday, as investors see volatile oil prices and mixed performance in Wall St as they also monitor broker updates on major Australian stocks.
Key Highlights
- ASX set to fall 0.1pc at the open
- SPI futures imply a 7-point drop at the open
- Oil prices were a mixed overnight as US-Iran tensions remained a key focal point in markets
- Goodman Group maintained a buy from Bell Potter
- Mining share prices felt the heat as gold edged lower
- Life360 shares maintained as buying by Bell Potter
ASX 200 to open lower amid mixed Wall st session
On Wednesday morning the Australian share price is expected to open slightly lower following a mixed overnight session on Wall Street. SPI futures suggest that the ASX 200 could open down approximately 7 points or 0.1%, following a fall of 0.4% on Tuesday to end at 8657.8 points for the benchmark index.
Meanwhile, in the US, the Dow Jones slipped 0.25%, while S&P 500 advanced 0.6% and Google-parent Alphabet rose 1.2% as investors rotated into technology shares regardless of geopolitical uncertainty and fears of inflation.
Oil Prices Kept In Check By US-Iran Tensions
Energy stocks such as Beach Energy and Santos should continue to be the centre of attention after oil markets had another wild night. The traders’ reactions to the wreckage of renewed tensions between US and Iran led WTI crude prices dropping 3.4% to US$93.29 a barrel, while Brent crude gained 3.3% to hit US$99.29 a barrel.
Gold dipped overnight (gold futures down 0.3% to US$4,510 an ounce). The drop could put some pressure on ASX gold plays such as Newmont and Northern Star Resources by worrying investors that higher energy prices will keep inflation sticky for longer or curb expectations of possible interest rate cuts.
Broker Support Moves Positive on Goodman and Life360
Goodman Group also attracted broker attention as Bell Potter retained its buy rating on the industrial property giant after its third-quarter update. The company remains positive on the long-term outlook for Goodman Group but cut its price target slightly to $35.50. Demand relating to large-scale data centre development remained strong, it said.
Bell Potter retained a buy on Life360 shares and upped its price target to $33.00. Ahead of the company’s quarterly earnings update for August, the broker noted it was expecting solid growth in both paying subscriber and user numbers.
FAQs
- Is the ASX 200 prediction expected to rise today?
No, SPI futures point to a slightly lower open for the ASX 200 on Wednesday.
- Why are oil prices volatile?
Current oil markets are still trying to balance the latest move in domestic US and Iran tensions.
- Which ASX stocks to watch today?
Goodman Group, Life360, Santos, Beach Energy and Newmont and Northern Star all under the spotlight()
- What is piling pressure on gold stocks?
Gold fell overnight amid fears that rising fuel prices are increasingly inflationary.
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