Australian investors are likely to experience another positive session following a strong performance by the S&P/ASX 200 Index (ASX: XJO) on Wednesday. The benchmark index surged 1.75%, closing at 8,092.3 points, setting a hopeful tone for the trading day ahead.
Here are five key factors to consider for Thursday's market session:
ASX 200 Expected to Rise The Australian share market appears poised for an additional gain on Thursday, buoyed by a robust performance in the United States. Based on the latest SPI futures, the ASX 200 is projected to open 14 points, or 0.15%, higher. The positive sentiment is largely attributed to the US Federal Reserve’s announcement of its intention to cut interest rates in September, which drove significant gains on Wall Street. The Dow Jones Industrial Average increased by 0.25%, the S&P 500 rose by 1.6%, and the Nasdaq Composite advanced by 2.65%.
Oil Prices Surge Energy sector stocks within the ASX 200, such as Beach Energy Ltd (ASX: ASX:BPT) and Woodside Energy Group Ltd (ASX: WDS), may see positive movement following a notable increase in oil prices. Bloomberg reports that WTI crude oil prices have climbed by 5% to US$78.40 per barrel, while Brent crude prices are up by 2.7% to US$80.72 per barrel. The rise in oil prices is attributed to escalating tensions in the Middle East, which have impacted global oil supply concerns.
TPG Telecom Shares Under Pressure Shares of TPG Telecom Ltd (ASX: TPG) may face downward pressure as recent evaluations suggest that the company’s stock is currently overvalued. Factors influencing this perspective include relatively lower valuation support compared to industry peers, uncertainties in earnings outlook due to increased cost inflation, and limited balance sheet flexibility. Nonetheless, potential upside risks such as mergers and acquisitions or successful execution of the company’s transformation program could influence future performance.
Gold Price Rally Gold shares on the ASX 200, including companies such as Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: ASX:NST), could benefit from a significant increase in gold prices. According to CNBC, the spot gold price has risen by 1.7% to US$2,494.4 per ounce. The rise in gold prices is driven by increased market expectations of interest rate cuts, which have historically supported higher gold prices.
Rio Tinto Shares in Focus Rio Tinto Ltd (ASX: ASX:RIO) may present an attractive investment opportunity, with analysts expressing optimism about the mining giant’s growth prospects. Positive reviews of Rio Tinto’s half-year results have reinforced the company’s strong outlook. The company’s advanced projects, such as the Resolution copper and Jadar lithium projects, as well as its brownfields growth initiatives and potential to enhance underperforming assets, are seen as key drivers for future value creation.
Thursday’s market session is set to be influenced by a range of factors, from international market trends and commodity price movements to company-specific developments. Investors should monitor these elements closely as they could significantly impact the Australian share market and individual stock performances throughout the day.