A big one-day selloff in iron ore and declines in US stocks will see our market return some of yesterday's strong gains this morning.
The futures market is pointing to a 0.4% decline in the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) this morning with iron ore miners like Fortescue Metals Group Limited (ASX: FMG) and Rio Tinto Limited (ASX: RIO) likely to be weighed down by a 6% plunge in the steel making commodity to $US55.63 a tonne.
Gold miners Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) will also be pressured by a 0.5% drop in the precious metal to a 15-week low of $US1,164 an ounce.
Underwear and linen distributor Pacific Brands Limited (ASX: PBG) could also pare some of yesterday's stellar 50.8% surge to 49 cents that was sparked by a profit upgrade. While I think the re-rating of the stock is justified, the gains were too far too fast and shareholders will be tempted to take profits in the short term.
Stock exchange operator ASX Ltd (ASX: ASX) could also feel the heat as rival Chi-X is talking to regulators about listing offshore stocks in Australia. The ASX is also said to be looking at a similar option, according to the Australian Financial Review.
On the flipside, childcare operator Affinity Education Group Ltd (ASX: AFJ) is set to bounce as rival G8 Education Ltd (ASX: GEM) is preparing a takeover bid for the company, according to the AFR.
Affinity Education crashed 34.2% to a record low of 54 cents yesterday following its weaker-than-expected full year profit guidance.
But Affinity Education isn't the only one under the corporate action spotlight today. Mining and steel company Arrium Ltd (ASX: ARI) is fielding interest in its mining consumables business and has appointed investment bank Lazard to help screen bids, according to Bloomberg.
Utility AGL Energy Ltd (ASX: AGL) is also getting strong interest for its Macarthur wind farm. The AFR said the company has received at least five indicative bids for the asset.
Port operator Asciano Ltd (ASX: AIO) will also be in the spotlight as its chairman is fronting shareholders today following the takeover bid for the company by Brookfield Infrastructure Partners.
Meanwhile, nickel miner Western Areas Ltd (ASX: WSA) could find support after management announced that it is debt free for the first time since 2004 after repaying $125 million of convertible bonds. Analysts also believe that the commodity has bottomed and will recover from here following a surge in imports of nickel into China in May.
Finally, retail stocks like Harvey Norman Holdings Limited (ASX: HVN) and Myer Holdings (ASX: MYR) will be in focus when the June retail sales figures are released at 11.30am this morning.
