Brace for a market sell-off this morning as our market is expected to follow US and European equities lower although we could see some buying support for resource stocks.
The futures market is pricing in a 0.8% drop in the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) although oil and gold prices firmed in overnight trade, while copper entered a bull market after staging its longest rally in nearly a decade.
The West Texas Intermediate (WTI) crude oil benchmark jumped 3.1% to $60.74 as gold gained 0.5% to $US1,192 an ounce and copper inched up 0.3% to $US2.93 a pound. Copper has gained around 20% since hitting a low at the end of January.
That should spur further gains for our oil majors Santos Ltd (ASX: STO), Woodside Petroleum Limited (ASX: WPL) and Oil Search Limited (ASX: OSH). These stocks have outperformed the ASX 200 index over the past month.
Gold and copper miners like Newcrest Mining Limited (ASX: NCM), Sandfire Resources NL (ASX: SFR) and OZ Minerals Limited (ASX: OZL) should be able to recover some, if not all, of yesterday’s losses on the back of higher commodity prices.
TPG Telecom Ltd (ASX: TPM) has sweetened its offer for rival iiNet Limited (ASX: IIN) with a cash and scrip deal worth $1.57 billion in an attempt to upstage M2 Group Ltd’s (ASX: MTU) competing offer.
You can expect some sharp moves in the share prices of these stocks today.
Meanwhile, earnings news will also be a key market focus today. Australia’s largest home lender Commonwealth Bank of Australia (ASX: CBA) will be posting its quarterly results and the market will be watching to see if it can pull a similar rabbit out of its hat as Australia and New Zealand Banking Group (ASX: ANZ) did yesterday.
ANZ delivered a better-than-expected half year net profit that saw its shares jump 2.7% to $34.12. The result was enough to convince Bell Potter to upgrade the stock to “buy” from “hold” and for JPMorgan to lift its rating to “neutral” from “underweight”.
Embattled supermarket giant Woolworths Limited (ASX: WOW) will be giving investors a third quarter sales update, while property company Goodman Group (ASX: GMG) is also expected to release its March quarter numbers.
Woolies has been losing market share to its rivals and shareholders will be keen to hear how it plans to stem the losses from its home improvement and groceries businesses.
In the media sector, Fairfax Media Limited (ASX: FXJ) released a trading update this morning, while News Corp (ASX: NWS) is likely to be under some selling pressure as it announced a quarterly profit last night that missed expectations.
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Motley Fool contributor Brendon Lau owns shares of iiNet Ltd., M2 Group Ltd, Oil Search Limited, PanAust Limited, Ramsay Health Care Limited, and Woodside Petroleum Ltd.. Follow me on Twitter - https://twitter.com/brenlau
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.