Our market isn't expected to go anywhere this morning as investors mark time ahead of the interest rate decision and as gains on US and European equities were offset by falls in commodity prices.
Traders are expecting the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) to open flat and remain directionless until the Reserve Bank of Australia (RBA) hands down its cash rate call at 2.30pm.
Economists largely expect there to be no change to the cash rate, which stand at 2%, but the majority are convinced that the RBA will need to cut the rate by 25 basis points (or 0.25 of a percentage point) before the end of the calendar year.
That will be good news for the big banks like Commonwealth Bank of Australia (ASX: CBA) and Westpac Banking Corp (ASX: WBC) as a fall in rates will help alleviate margin pressure.
The RBA doesn't need to cut the rate to spark a rally in the sector. It only needs to give a reasonably strong indication that it is looking to lower the cash rate again in the near-term to inject some excitement into bank stocks.
But big resources stocks like BHP Billiton Limited (ASX: BHP) and Woodside Petroleum Limited (ASX: WPL) are unlikely to find much relief today on broad based weakness in the commodities markets. The West Texas Intermediate (WTI) oil price slipped 0.2% to $US60.20 a barrel and copper fell 0.3% to $US2.72 a pound.
Building materials group CSR Limited (ASX: CSR) is also expected to drag on the market as the stock trades without its dividend entitlement today.
On the flipside, liver cancer treatment developer Sirtex Medical Limited (ASX: SRX) is likely to extend its 14.4% surge yesterday as WilsonHTM upgraded the stock to "buy" from "hold" following Sirtex's well received presentation to the American Society of Clinical Oncology.
Engineering contractor UGL Limited (ASX: UGL) is also poised to build on yesterday's stunning 10.3% jump that was triggered by a bullish market update as analysts at the Commonwealth Bank lifted their recommendation to "overweight" from "neutral".
Staffing and maintenance services group Programmed Maintenance Services Limited (ASX: PRG) could also find support today after fund manager Tribeca Investment Partners lodged a substantial holders notice with the ASX when it bought a 6.5% stake.
In corporate news, packaging company Pact Group Holdings (ASX: PGH) is in talks to buy contract manufacturer Jalco Group for $150 million, according to the Australian Financial Review; while property group Mirvac Group (ASX: MGR) has appointed Accenture to review its business structure, reported The Australian.
