Bargain hunters are expected to step back into the market this morning following yesterday's sharp fall with gains in US and European equities fuelling the positive sentiment.
Offshore leads will play a bigger role in setting the tone of the market today as there's little in the way of corporate news.
The futures market is pricing in an early advance of 0.4% for the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO), even as commodities fell or were flat in overnight trade. The top-200 index shed 1.3% yesterday.
This doesn't necessarily mean we won't see gains in the mining sector and all eyes will be on BHP Billiton Limited's (ASX: BHP) spin-off South32 Ltd (ASX: S32), which started trading yesterday.
Just as South32 debuted at a market capitalisation below what most analysts were expecting in Australia, it got the same outcome when it traded in the UK.
But the stock could bounce back today as JPMorgan and RBC Capital initiated coverage on the stock with a "buy" equivalent recommendation and a price target of $2.95 and $2.60, respectively, versus its last closing price of $2.05.
On the other hand, iron ore producers like Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG) may find themselves on the wrong side of trade today, as the price of the steel-making commodity fell for the fifth straight session.
A new day seems to bring a fresh bearish call on iron ore. This time Citigroup is the one calling for the commodity to crash to $US40 a tonne.
As I wrote yesterday, if the iron ore bears are right, it will threaten the revival of Atlas Iron Limited (ASX: AGO). Atlas could be coming back as a zombie.
Industrial and agri chemical supplier Incitec Pivot Ltd Ltd (ASX: IPL) and sleep disorder treatment company ResMed Inc. (CHESS) (ASX: RMD) are likely to weigh on the market as they go ex-div today – meaning the stocks are trading without their dividend entitlements.
In corporate news, retirement home operator Infratil Ltd. (ASX: IFZ) handed in its full year results this morning showing a 9.3% rise in revenue to $NZ1.66 billion ($1.54 billion), while the chief executive of engineering contractor Seymour Whyte Ltd (ASX: SWL) has resigned suddenly.
An unexpected and immediate departure of a key executive is usually bad news for any organisation.
