As we approach the final trading day of the year, the S&P/ASX 200 Index (ASX: XJO) has been on a robust trajectory, marking a 0.7% rise to 7,614.3 points on Thursday. Investors are now eagerly anticipating whether this positive momentum will carry over to Friday, culminating in a high note to conclude 2023.


Image Credit: Pexels

1. ASX 200's Potential Dip

The Australian share market appears poised to conclude the year on a more subdued note, despite a favorable night on Wall Street. Indications from the latest SPI futures suggest that the ASX 200 might open 0.3% lower, around 21 points down. Examining the late Wall Street trade, the Dow Jones is up 0.2%, the S&P 500 is up 0.15%, and the NASDAQ is up 0.25%.

2. Energy Sector Under Pressure

ASX energy shares, notably Beach Energy Ltd (ASX: BPT) and Karoon Energy Ltd (ASX: KAR), could face challenges as oil prices took a nosedive overnight. Bloomberg reports a 3.1% drop in the WTI crude oil price to US$71.84 a barrel and a 1.6% decline in the Brent crude oil price to US$78.37 a barrel. The easing disruption in the Red Sea contributed to these declines.

3. Iron Ore Price Retreat

Investor attention will be on BHP Group Ltd (ASX: BHP) and Rio Tinto Ltd (ASX: RIO) shares as the iron ore price rally loses steam. The spot benchmark iron ore price is down 1.8% to US$138.70 a tonne, signaling potential implications for major mining companies.

4. Gold Prices in Flux

ASX 200 gold shares, including Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST), are on watch as the gold price experienced a slight dip. CNBC reports a 0.7% decrease in the spot gold price to US$2,078.7 an ounce. Traders appear to be capitalizing on increased US bond yields, prompting profit-taking in the gold market.

5. Eagers Automotive Cyber Incident

The return of Eagers Automotive Ltd (ASX: APE) from its trading halt is eagerly awaited, following a cybersecurity incident that prompted the automotive retail giant to request a trading halt. Investors are keen to hear the details of the announcement prepared in response to this cyber incident.

Conclusion: Navigating the Year's Final Trading Day

As we navigate the final trading day of the year, the market is rife with anticipation and uncertainty. From potential market dips to the repercussions of geopolitical events, each factor contributes to the intricate tapestry of the financial landscape. Investors are urged to stay vigilant and adapt to the evolving market dynamics.


FAQs

Q1: What are SPI futures, and how do they impact the ASX 200's opening?


SPI futures are financial derivatives based on the S&P/ASX 200 Index, influencing its opening by providing insights into market sentiment and potential movements.


Q2: Why did oil prices fall, and how might it affect energy shares?


Oil prices fell due to the easing disruption in the Red Sea, impacting energy shares like Beach Energy and Karoon Energy, signaling potential challenges.


Q3: What led to the decline in the iron ore price, and how does it affect mining companies?


The iron ore price retreated due to market dynamics, affecting major mining companies such as BHP Group and Rio Tinto.