Watch out! Embattled iron ore miners will be on the comeback trail today as the price of the commodity staged its best one-day jump in two-and-a-half years.
But the euphoria won’t spread to the rest of the market as the futures market is only pricing in a 0.2% advance for the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO).
The spotlight will clearly be on the iron ore majors BHP Billiton Limited (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG) after the Metal Bulletin iron ore price index jumped 5.9% to $US54.04 a tonne.
The big rally in the steel making ingredient comes after BHP announced yesterday that it would defer its expansion project to reduce congestion at its export terminal in Port Hedland.
The jump in iron ore is more significant for smaller and higher cost producers but it is BC Iron Limited (ASX: BCI) that will be more closely scrutinised as management is expected to hand in its March quarterly activity statement today.
Australia’s largest gold miner Newcrest Mining Limited (ASX: NCM) will also announce its quarterly numbers although an overnight drop in the gold price won’t help sentiment towards the sector.
But the miners won’t be the only stocks on the move today as investors have a fresh wave of broker recommendation changes to digest.
Glove and condom maker Ansell Limited (ASX: ANN) has been upgraded to “neutral” from “underperform” by Credit Suisse after the stock retreated by nearly $2 from last week’s record peak of $30.21.
The broker also lifted its recommendation on agri-chemical company Nufarm Limited (ASX: NUF) to “neutral” from “underperform”
Credit Suisse isn’t the only one that has been busy reviewing its stock ratings. Morningstar has upped its recommendation on Insurance Australia Group Ltd (ASX: IAG), National Australia Bank Ltd. (ASX: NAB) and publishing and broadcast group Seven West Media Ltd (ASX: SWM) to “buy” versus “hold”.
Meanwhile, gold miner Perseus Mining Limited (ASX: PRU) was upgraded to “buy” from “hold” by Argonaut Securities after the stock surged 23.2% yesterday to 34.5 cents.
On the flipside, oil and gas explorer Drillsearch Energy Limited (ASX: DLS) has been cut to “hold” from ”buy” by GMP, while copper and gold miner Independence Group NL (ASX: IGO) was reduced to a “hold” equivalent from “buy” by UBS and Wilson HTM.
Both miners had released their quarterly reports yesterday.
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Motley Fool contributor Brendon Lau owns shares in BHP, Rio Tinto, NAB and PanAust. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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