The market rout is expected to deepen this morning as US and European stocks suffered big losses and commodity prices fell again after Greece took a step closer to bankruptcy on the weekend.
The futures market is betting on a 0.5% fall at the open for the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) with resource stocks like BHP Billiton Limited (ASX: BHP) and Woodside Petroleum Limited (ASX: WPL) expected to take a hit from weaker oil and iron ore prices.
The West Texas Intermediate (WTI) oil price dipped 0.1% to $US58.27 a barrel while iron ore marked its third day of losses as it shed 1.2% to $US61.29 a tonne.
But the big banks like Commonwealth Bank of Australia (ASX: CBA) and Australia and New Zealand Banking Group (ASX: ANZ) might be worse for wear as the Greek crisis has a more direct impact on the sector, which relies heavily on offshore funding to sustain its operations.
Greece's expulsion from the European Union could freeze global funding markets. There's no real evidence to suggest this will happen, but there isn't anything to suggest it won't either – and investors just don't cope well with uncertainties.
However, as I suggested before this is a good period to buy the market and a raft of broker upgrades on blue chip stocks after yesterday's 2.2% crash on the top-200 stock index reinforces this view.
Regional lenders Bank of Queensland Limited (ASX: BOQ) and Bendigo and Adelaide Bank Ltd (ASX: BEN) are upgraded to a "buy" from "hold by Bell Potter, property trust GPT Group (ASX: GPT) and fund manager Perpetual Limited (ASX: PPT) are lifted to "buy" from "hold" by Morningstar, and building fixtures supplier GWA Group Ltd (ASX: GWA) is raised to "buy" from "neutral" by UBS even after it issued a profit warning yesterday.
There's also plenty of other news to excite investors today. Adventure gear retailer Kathmandu Holdings Ltd (ASX: KMD) is expected to surge after Briscoe Group bought a 19.9% stake and said it was looking to launch a full takeover of the company.
Mining giant Rio Tinto Limited (ASX: RIO) is negotiating to sell controlling stakes in three of its Australian coal mines to X2 in a deal that could fetch $2-$4 billion, according to a report from Bloomberg.
Salmon farmer Tassal Group Limited (ASX: TGR) is also likely to find support after it struck a deal to supply fresh fish to Aldi and has extended its supply agreement with Woolworths Limited (ASX: WOW).
Woolworths will be in the spotlight as well as it looks to sell its specialty grocer Thomas Dux, reported the Australian Financial Review.
The market may open weak but bargain hunters may step up to the plate. End of financial year window dressing will add to the volatility too, so hang on for the ride Fools!
