A big jump in commodity prices is offsetting falls in US and European equities with our market tipped to open at the same level as it finished yesterday.
I am relieved to see the futures market pointing to a flat start for the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) after its 1.7% belting on Tuesday, although I suspect the market won't end the trading day with little change.
Resource stocks are expected to outperform strongly with the US-traded shares of BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO) jumping 2.3% and 3.5%, respectively. This is their biggest one-day gain in over a month.
We can thank a big slide in the US dollar for the renewed interest in commodities with the greenback suffering its biggest loss in more than two months. This pushed the iron ore price up 1.9% to $US63.02 a tonne as the West Texas Intermediate (WTI) oil price jumped 1.8% to $US61.26 a barrel and copper advanced 0.6% to a little under $US2.74 a pound.
Diversified base metal miner South32 Ltd (ASX: S32) could get an additional boost after Morgan Stanley initiated coverage on the stock with an "overweight" recommendation and $2.55 price target. I think South32 represents good longer-term value.
Gold Road Resources Ltd (ASX: GOR) has chosen a good day to tap investors for cash. Bloomberg reports that the gold explorer is undertaking a $39.3 million share placement.
Elsewhere, adventure gear retailer Kathmandu Holdings Ltd (ASX: KMD), agri-business Ruralco Holdings Ltd (ASX: RHL) and utility company Infratil Ltd. (ASX: IFZ) will drag on the market as they trade without their dividend entitlements.
GWA Group Ltd (ASX: GWA) is another stock that will fall as it trades without the rights to its stock split and $88 million capital return to shareholders.
You will be forgiven if you are feeling confused about what to make of Virtus Health Ltd (ASX: VRT) after its 20% crash yesterday on a profit warning. Even the experts can't agree with UBS cutting the fertility treatment company to "neutral" from "buy" and Morningstar upgrading it to "buy" from "neutral".
On the corporate action front, toll road operator Transurban Group (ASX: TCL) is among the potential bidders for BrisConnections, according to The Australian.
The other big economic news that could impact on how we finish the trading day is the Australia's March quarter gross domestic product (GDP) numbers that will be released at 11.30 this morning.
Stay with the Motley Fool as we'll bring you an update on this and what it means for your investments.
