If the big swings on our market are making you feel queasy, you might want to stay in bed today as our market is expected to rally this morning after US stocks jumped on expectations that interest rates in that country will rise slower than expected.
The futures market is pointing to a 0.7% increase in the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) and gains in most commodities on the weaker US dollar will support our resources stocks.
But its gold miners like Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) that could be leading the charge as the price of the precious metal jumped by the most in five weeks in overnight trade.
My colleague Mitch Sonogan is also calling Northern Star one of the best in the sector.
Gold surged 2.1% to $US1,202 an ounce as it also got a lift from the ensuing Greek crisis, the West Texas Intermediate (WTI) crude oil price lifted 0.9% to $US60.45 a barrel and iron ore gained 0.4% to$US61.77 a tonne.
But questions about the sustainability of the jump in the iron ore price won’t go away with major producer Rio Tinto Limited (ASX: RIO) warning of slower Chinese demand for the steel making ingredient as its economy shifts from exports to domestic consumption.
BHP Billiton Limited (ASX: BHP) will find itself in the spotlight for another reason. The mining giant is believed to be one of the companies engaged in the final round of bidding for Barrick’s Chile gold mine that is valued at over $US2 billion.
Elsewhere, the chief executive of embattled mining services group Bradken Limited (ASX: BKN) will leave the company after presiding over a 40% crash in Bradken’s share price.
The stronger Australian dollar, which broke above US78 cents, will be a drag on offshore earners but global logistics group Brambles Limited (ASX: BXB) may fair better than most after Morningstar upgraded the stock to “buy” from “hold” following its close to 10% fall since early April.
Free-to-air TV company Ten Network Holdings Limited (ASX: TEN) may also see a bounce after Morningstar upped its rating on the stock to “hold” from “sell” following its 12.8% plunge yesterday on news that the federal government is scraping plans to ease media ownership restrictions.
Other stocks investors will be eyeing are explosives maker Orica Ltd (ASX: ORI) after it announced it won a 10-year drilling and blasting contract with PhosAgro, and News Corp (ASX: NWS) as the media giant plans to initiate semi-annual dividend payments worth around 10 cents a share.
Property company Goodman Group (ASX: GMG) will also be in the spotlight after it sold 19 warehouses in France and Germany to a subsidiary of private equity firm Blackstone.
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Motley Fool contributor Brendon Lau owns shares of BHP Billiton Limited, Bradken Limited, and Rio Tinto 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.
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