Steel yourselves Fools! Things could get ugly today as bears are likely to dominate the day’s trade on the back of big falls in US and European stock markets and a slide in commodity prices.
The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) is expected to fall 0.9% this morning to match the Friday night losses of its counterparts in the Northern Hemisphere and it looks like resource stocks will again be taking the brunt of the beating.
Fresh signs of a slowdown in Chinese industrial production and the US housing market conspired to send iron ore falling 0.6% to $US51.42 a tonne as the West Texas Intermediate (WTI) crude price shed 0.6% to $US48.14 a barrel.
That’s bad news for mining and oil giant BHP Billiton Limited (ASX: BHP) as it will probably fall for the sixth consecutive trading day today as its US-listed stock closed 1.7% lower last week.
But it’s junior iron ore miner Atlas Iron Limited (ASX: AGO) that will be in the spotlight as the stock resumes trading and is expected to release its June quarter production results. The miner has been suspended from the ASX since April 2 as it recapitalises and restructures its operations in the wake of the collapse in the iron ore price.
There will be no love for gold stocks either as the precious metal tumbled to a five-year low when it lost 0.8% to $US1,085.50 an ounce.
Northern Star Resources Ltd (ASX: NST) is still profitable at this level according to its quarterly report released this morning as the gold miner has managed to deliver all-in sustaining costs of $1,065 ($US775) an ounce for the full year, which is at the lower end of its guidance. Alacer Gold Corp – CDI (ASX: AQG) is also expected to post its quarterly today.
There’s also plenty of action outside of resources. Education services group Navitas Limited (ASX: NVT) will hand in its full year profit result this morning, while shareholders in telecommunications company iiNet Limited (ASX: IIN) will vote on TPG Telecom Ltd’s (ASX: TPM) bid for the company.
The iiNet meeting will be closely watched as it’s uncertain if TPG can get the numbers to seal the deal after some iiNet shareholders said TPG isn’t offering enough. M2 Group Ltd (ASX: MTU) has made a competing bid for iiNet.
Free-to-air television broadcaster Ten Network Holdings Limited (ASX: TEN) will also be in the spotlight after the Australian Financial Review reported that the competition watchdog will consider all of the Murdoch family’s media interests when assessing pay TV operator Foxtel’s move to buy a 15% stake in Ten.
The Murdochs own part of Foxtel and the comments indicate that it might be harder for Foxtel to secure the blessing of the competition watchdog.
Finally, gas utility APA Group (ASX: APA) may also have hit a stumbling block on the merger and acquisition (M&A) front. The group could be facing stiff competition from Canada’s Enbridge for Energy Australia’s Ion gas plant, according to the AFR.
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Motley Fool contributor Brendon Lau owns shares of BHP Billiton Limited, iiNet Ltd., and M2 Group 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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