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Morning market movers: 12 stocks to watch

Our market will take a stab at breaking above the psychologically important 5,600 level this morning following advances in US and European equities overnight with Greece’s back down with creditors continuing to fuel the risk trade.

The futures market is pricing in a 0.4% gain for the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) this morning to 5,598 points and the expected gain follows yesterday’s stunning 1.9% surge in the index.

But a break higher will probably have to be done without the support of the miners like BHP Billiton Limited (ASX: BHP) and gold producers like Newcrest Mining Limited (ASX: NCM), with iron ore snapping a three-day winning streak and gold dipping 0.2% to $US1,153.50 an ounce.

Brace yourself for more worries over the outlook for iron ore as the commodity shed 0.5% to $US50.06 a tonne, according to the Metal Bulletin. But the steel making ingredient is expected to fall much further before the end of the calendar year even as Brazilian giant Vale promised to cut 25 million tonnes of supply.

Clacksons Platou is the latest investment bank to predict that the steel making ingredient will fall below $US40 a tonne in the current half while Morgan Stanley warns that Vale’s decision is no panacea for iron ore.

On the other hand, oil stocks such as Woodside Petroleum Limited (ASX: WPL) and Santos Ltd (ASX: STO) could find support after the West Texas Intermediate (WTI) crude price jumped 0.6% to $US53.34 a barrel.

On the merger and acquisition front (M&A), electric utility AusNet Services (ASX: AST) could be going head-to-head with investment bank Macquarie Group Ltd (ASX: MQG) as they are both reported to be interested in bidding for New South Wales electricity network operator TransGrid.

Challenger Ltd (ASX: CGF) has agreed to buy European alternative investment group Dexion Capital Holdings for $41 million plus earn-outs. Management said the deal is immediately earnings accretive and the acquisition will meet its 18% pre-tax return on equity target.

There are also fresh doubts about whether TPG Telecom Ltd (ASX: TPM) can successfully acquire iiNet Limited (ASX: IIN) after some shareholders have come out to say the competing offer from M2 Group Ltd (ASX; MTU) is superior, reported The Australian.

Losing iiNet would be a second big blow to TPG Telecom following its failure to block the merger between Vocus Communications Limited (ASX: VOC) and Amcom Telecommunications Limited (ASX: AMM).

In the agribusiness space, Select Harvests Limited (ASX: SHV) will be in the spotlight after it raised price estimates for its almonds to $11.45 a kilogram from $11, while Indonesia’s decision to limit the number of cattle imports from Australia will be a hot topic of conversation at Australian Agricultural Company Ltd’s (ASX: AAC) annual general meeting today.

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Motley Fool contributor Brendon Lau owns shares of BHP Billiton Limited, iiNet Ltd., M2 Group 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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