The "Warren Buffett" halo effect is expected to spread to the banks as our market is poised to open strongly on the back of gains by US and European stocks.
The futures market is pricing in a 0.7% rise for the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) this morning and big bank stocks are likely to lead the charge.
Warren Buffett's Berkshire Hathaway is looking at investing in Australian banks and other ASX-listed companies as it looks to invest $2 billion a year in Australia after taking a $500 million stake in Insurance Australia Group Ltd (ASX: IAG), according to press reports from Fairfax Media Limited (ASX:FXJ).
Shares in Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group (ASX: ANZ) and National Australia Bank Ltd. (ASX: NAB) have recently bounced on bargain hunting and the news is likely to spur further buying in the stocks.
ANZ will also be in focus as it looks to sell part of its $100 million loan to Nobel Group, according to the Wall Street Journal.
Mining stocks like Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG) are likely to come under pressure after Macquarie reported that China steel orders dropped in June as sentiment weakens, although shareholders can take some comfort in a NAB report that China's iron ore output dropped 10% in the first five months of this year.
Commodity traders took "the glass half empty view" though. The price of iron ore suffered its worst fall in nearly a month as it shed 2.1% to $US62.91 a tonne while copper declined 1.2% to $US2.62 a pound and gold dipped 0.4% to $US1,181 an ounce.
While the market is mulling Insurance Australia's deal with Berkshire, QBE Insurance Group Ltd (ASX: QBE) has to deal with reports that a former executive embezzled $2.6 million from the insurer.
Supermarket giant Woolworths Limited (ASX: WOW) will also be the spotlight after it cut its guidance and announced the departure of its chief executive.
Elsewhere, the debut of homewares company Adairs Group (ASX: ADH) on the ASX will be closely watched given the deteriorating conditions for initial public offers; while consumer leasing company FlexiGroup Limited (ASX: FXL) raises $285 million through the sale of asset backed securities.
Finally, sleep disorder treatment device company Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) could come under pressure today as its stock trades without its dividend entitlement and retirement village operator Aveo Group (ASX: AOG) said it would pay a 5 cent a share dividend for 2014-15.
