ASX 200 Set for Weaker Open Today as Oil and Gold Prices Tumble
Synopsis
The ASX 200 is expected to open lower on Thursday despite another positive overnight session on Wall Street, with falling oil and gold prices likely to weigh on Australian energy and mining stocks. Brent crude oil prices dropped almost 5% after optimism grew around possible US-Iran peace talks, while gold prices fell to a two-month low amid rising interest rate concerns. Analysts say companies including Santos, Woodside Energy, Newmont and Northern Star Resources could remain under pressure. Meanwhile, brokers continue highlighting Nufarm and Eagers Automotive as stocks to watch despite broader market weakness.
ASX 200 is expected to open lower on Thursday due to drop in price of gold and oil.
Key Highlights
- ASX 200 to open down another 45 points
- Oil tumbles as US-Iran peace talks continue to progress
- Gold price fell to a two-month low
- Selling pressures may continue for energy and gold stocks
- Bell Potter is still bullish on Nufarm and Eagers Automotive shares
ASX 200 set to open lower on Thursday
The ASX 200 is expected to open lower on Thursday after futures indicated a weaker start despite Wall Street leading positively overnight. SBI pointed to a loss of about 45 points or roughly 0.5% for the Australian share market at the open after Wednesday's rally through 8700 points.
US markets finished a little higher, with the DJIA up 0.4% and the S&P 500 up 1 point, while the Nasdaq moved into positive territory. However, weaker commodity prices should cap Australian resource and energy shares at the opening.
Oil and gold prices pressure ASX sectors
Australian energy stocks, Woodside Energy Group and Santos, Brent crude sank nearly 5% to below US$95 a barrel, with WTI falling to US$89 following comments from U.S. officials that Iran peace talks would be given “every chance of success”.
Gold miners might also come under pressure after gold prices fell 1% to a two-month low amid rising hopes that global interest rates could remain at higher levels for an even longer period. Investors are also expected to reassess commodity market risks and focus on major ASX gold producers such as Newmont and Northern Star Resources.
Brokers continue to be positive on selective ASX stocks
Analysts still find a few ASX shares to buy for investors despite broader market weakness. The agricultural chemicals group jumped almost 14% after its latest results, prompting Bell Potter to retain its buy rating. Ongoing cost-cutting initiatives along with potential further support for earnings growth from increasingly stronger omega-3 pricing could continue to support.
Bell Potter also held onto a buy rating on Eagers Automotive shares after its AGM. Analysts said investors are now focusing on May and June quarter vehicle sales, which are typically among the company's strongest trading periods.
FAQs
- Why is ASX 200 expected top open low on Thursday?
ASX 200 might open lower on Thursday due to fall in oil and gold prices.
- Why did oil prices fall?
Oil price fell as hopes of resuming US-Iran peace talks mount
- Which ASX sectors are likely to be weakest today?
Energy and gold mining shares are expected to suffer the most.
- Which ASX stocks will be bullish as per analysts?
Bell Potter retains positive coverage on Nufarm and Eagers Automotive shares.
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