Australian equities are expected to recover yesterday's losses as the Dow Jones Industrial Index popped over 200 points higher and iron ore rallied for a second day.
Australian investors were unimpressed with China's aggressive cut to the amount of cash its banks need to hold in reserves with the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) slumping 0.8% yesterday.
But the stimulatory move by China is cited as one reason behind the big pop in US equities and the futures market is pointing to around a 0.77% jump in the Australian top-200 stock index.
The iron ore majors like BHP Billiton Limited (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG) are likely to contribute strongly to the gains as the Metal Bulletin reports a 1.3% rise in iron ore prices to $US51.57 a tonne.
There's also good news for oil stocks as the West Texas Intermediate (WTI) crude oil price gained 0.6% to $US56.38 a barrel. Woodside Petroleum Limited (ASX: WPL), Oil Search Limited (ASX: OSH) and Santos Ltd (ASX: STO) are likely to be beneficiaries, although there are other reasons for investors to be looking at the latter two stocks.
Oil Search is scheduled to report its March quarter production report while Santos told shareholders to expect the liquefied natural gas (LNG) "train 1" from its GLNG project to be completed at the end of the third quarter as "train 2" will be in operation by the end of this year.
Broker recommendation changes are also expected to impact on a number of stocks today. Gold miner EVOLUTION FPO (ASX: EVN) was downgraded to "underweight" from "neutral" by analysts at the Commonwealth Bank of Australia (ASX: CBA), after it announced yesterday that it would acquire all of the Australian assets of La Mancha Group.
However, the bank upgraded copper-gold producer OZ Minerals Limited (ASX: OZL) to "neutral" from "underweight".
Share registry services company Computershare Limited (ASX: CPU), insurer QBE Insurance Group Limited (ASX: QBE) and leisure facilities operator Ardent Leisure Group (ASX: AAD) could also find support today after Morningstar upgraded the stocks to "buy" from "hold".
On the flipside share market operator ASX Ltd (ASX: ASX) was downgraded by Goldman Sachs to "sell" from "neutral".
On the corporate action front, Dow Jones reports that gold miner Newcrest Mining Limited (ASX: NCM) and US-based Hecla Mining are among the companies bidding for Barrick Gold's Cowal mine, while the Australian Financial Review reports that DEXUS Property Group (ASX: DXS), GPT Group (ASX: GPT) and Cromwell Group (ASX: CMW) are expected to bid for the $9 billion in property assets put up for sale by Investa Property Group.
