ASX 200 Set for Rise on Tuesday as Gold Stocks Surge and Oil Prices Tumble
Synopsis
Australia’s ASX 200 is expected to open higher on Tuesday after strong gains in European markets lifted investor confidence. Gold stocks including Newmont and Northern Star Resources may benefit after gold prices climbed overnight, while energy shares could face pressure following a sharp drop in oil prices linked to possible US-Iran peace progress. Investors are also watching Goodman Group’s quarterly results and a fresh broker upgrade for Wesfarmers shares.
The ASX is expected to rise on Tuesday after overnight gains across European stock markets and decrease Gold sectors.
Key Highlights
- ASX 200 to rise 22 points
- BSE Sensex also gains 0.4%; regains its lost 8k mark
Gold: -0.5%, $1,942/ounce West Texas crude oil + 2% $93/barrel - Brent crude oil -7% US$96.30/barrel
- Gold futures rose by 1.1 per cent to US$4,573.6 an ounce
- Goodman Group will provide third-quarter figures today.
- Morgan's broker upgrades Wesfarmers shares
ASX 200 expected to rise further
The Australian market appeared to be high for another day of positive sessions in line with strong overnight trade out of Europe. The DAX in Germany rose 2%, the CAC in France gained 1.75%, and the FTSE in the UK added 0.2%, supporting a more optimistic mood among investors worldwide. Wall Street was closed for the Memorial Day holiday but SPI futures still indicated Australian shares would open firmer after the ASX 200 finished Monday’s session up 0.4%.
Iran's peace hopes in oil plunge
Energy stocks such as Beach Energy and Santos will probably remain centre stage after a heavy overnight drop in oil prices. Brent crude fell 7% and WTI crude dropped 6.5%, as the market saw prospects for a US-Iran peace deal and the resumption of traffic through the Strait of Hormuz. Lower oil prices would weigh on energy shares but may also lift sentiment more broadly by taking some fear out of inflation.
Hopeful results of gold miners and Goodman
Gold prices rose 1.1% overnight, easing fears of further interest rate increases, as oil prices fell, which could benefit local gold stocks such as Newmont and Northern Star Resources. Goodman Group is a stock investors are watching ahead of its Q3 results today. Goodman is expected to reaffirm FY26 earnings growth guidance, but Morgan Stanley analysts think there is room for an upgrade after a string of deals in recent weeks.
Wesfarmers upgrade catches investor attention
Wesfarmers (ASX: WES) shares will likely remain active after broker Morgans upgraded the stock from ‘trim’ to an ‘accumulate’ rating. The broker said, after a 9 per cent fall over the past year, Wesfarmers was now priced at a more attractive earnings multiple and added that businesses such as Bunnings, Kmart, Officeworks and Priceline were performing well. Changes in lithium pricing will not have an immediate impact on Albemarle's earnings, but Morgans again said its recent performance could sustain growth in the group’s medium-term earnings.
FAQs
- Why is ASX 200 expected to surge on Tuesday?
European markets also made solid gains, helping underpin expectations of another higher open for investors.
- Why does Goodman Group share the spotlight?
Goodman Group delivers its quarterly update (Q3) amid speculation that it will upgrade earnings guidance.
- What did Morgan's prefer about Wesfarmers shares?
Following share price declines in recent weeks, the broker believes Wesfarmers is now good value and has strong retail businesses underway
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