Our market isn’t expected to hold above 5600 today as weak leads from Wall Street and falling commodity prices weigh on sentiment here.
The futures market is tipping a 0.5% decline in the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) this morning and resource stocks will likely be the biggest drag as the iron ore price broke a two day rise, according to the Metal Bulletin.
But it won’t only be the likes of Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG) that will be feeling the pain. Gold miners like Newcrest Mining Limited (ASX: NCM) and energy stocks like Woodside Petroleum Limited (ASX: WPL) are also expected to come under pressure.
The price of the steel making ingredient shed 0.5% to $US62.19 a tonne while gold dipped 0.1% to a three-week low of $US1,172 an ounce and the West Texas Intermediate (WTI) oil price slipped by an equal amount to $US59.64 a barrel.
Qantas Airways Limited (ASX: QAN) will also be in the spotlight as the Asian expansion of its budget carrier subsidiary Jetstar encountered headwinds after Hong Kong authorities knocked back its licensce application to fly in that country.
Meanwhile, the Australian Financial Review reports that embattled engineering contractor Bradken Limited (ASX: BKN) has gotten debt covenant relief from creditors while it finalises a recapitalisation deal with CHAMP Private Equity and Sigdo Koppers, which will see the two emerge as large shareholders in Bradken.
Bradken is currently in a trading halt and you can read more about it here.
But that’s not the only corporate deal for investors to chew on. Property company Mirvac Group (ASX: MGR) has been approached by US private equity group Blackstone to form a joint venture to bid for Investa’s assets, according to the AFR. Mirvac is cutting 75 jobs in a company restructure.
Free-to-air TV broadcasters won’t get much support either today after News Corp’s (ASX: NWS) co-chairman James Murdoch warned that the costs to buy sports-rights will likely continue to climb.
News Corp part owns pay-TV operator Foxtel and Foxtel is trying to secure all rights to major sports events from free-to-air rivals like Nine Entertainment Co Holdings Ltd (ASX: NEC), Seven West Media Ltd (ASX: SWM) and Ten Network Holdings Limited (ASX: TEN).
The warning comes at a time when free-to-air broadcasters are under financial pressure due to online streaming.
A whole group of stocks are also expected to fall as they trade without their dividend entitlements today. These include gas pipeline utility APA Group (ASX: APA), leisure facilities group Ardent Leisure Group (ASX: AAD), Sydney Airport Holdings Ltd (ASX: SYD), toll road operator Transurban Group (ASX: TCL), and property companies GPT Group (ASX: GPT), Federation Centers Ltd (ASX: FDC) and Stockland Corporation Ltd (ASX: SGP), just to name a few.
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Motley Fool contributor Brendon Lau owns shares of Ardent Leisure Group, Bradken Limited, Rio Tinto Ltd., and Woodside Petroleum 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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