S&P/ASX 200 Fundamental Analysis – August 24, 2016 – Forecast

The S&P/ASX 200 closed slightly higher on Tuesday at 5553.80, up 0.7% and is expected to open higher on Wednesday based on the strong performance in the U.S. equity markets. Generally speaking, it was a “risk on” day all over the globe with investors discounting the possibility of a Fed rate hike later this year.

In addition to the interest rate concerns in the U.S., corporate earnings were in focus with a number of promising results across the market. A weaker U.S. Dollar also helped boost commodities prices which underpinned commodity and natural resource stocks.

Gains were also seen across several key sectors including healthcare, financials and utilities. Helping to boost the index were gains in Bellamys Australia Ltd. (AX: BAL), Whitehaven Coal Ltd. (AX: WHC) and IPH Ltd. (AX: IPH). Pressuring the index was Monadelphous Group Ltd. (AX: MND), Worleyparsons Ltd (AX: WOR) and Syrah Res F (AX: SYR).

The ASX 200 is called about 0.3% better on the opening as investors hope to build on yesterday’s strong performance and positive developments in U.S. equities. There are no major economic reports today from Australia so the main focus will be on fresh corporate earnings results from local heavyweights including Wesfarmers Ltd. (AX: WES).

Looking at the index today in terms of sectors, traders will have a chance to react to several earnings reports from gold miners, mining services and gold miners. Rounding out today’s trade will also be reports from retail giants and out-of-home advertising businesses.