Fresh attempts to kick start the European economy will lift sentiment on our market this morning even though Wall Street gave back early strong rises to finish close to breakeven in overnight trade.
The futures market is pointing to a 0.4% rise for the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) at the open after the European Central Bank's decision to expand its quantitative easing (QE) program to stimulate the region's faltering economy and fight deflation gave most commodities a boost.
The West Texas Intermediate oil price jumped 1.1% to $US46.75 as copper rallied 2.4% to $US2.3845 a pound.
But optimism evaporated later in the US trading session as the S&P 500 reversed its 1.3% gain to close 0.1% higher as investors fretted about the all-important US jobs report due later tonight.
The data will be a big driver of our market on Monday and I suspect most Australian investors will be sitting on their hands today.
But there could be some stock rotation that's related to changes in the ASX 200 as a number of underperforming stocks are dumped from the key index. These include mining services company Bradken Limited (ASX: BKN), construction group UGL Limited (ASX: UGL) and adventure gear retailer Kathmandu Holdings Ltd (ASX: KMD) – just to name a few.
Some notable companies that will replace them include accounting software company Myob Group Ltd (ASX: MYO), shipbuilder Austal Limited (ASX: ASB) and hotel operator Mantra Group Ltd (ASX: MTR).
The changes to the index could add to the market volatility.
The takeover of nickel miner Sirius Resources N.L. (ASX: SIR) is also a done deal after shareholders voted in favour to merge with Independence Group NL (ASX: IGO) and Sirius' place in the ASX 200 will be taken by vitamins maker Blackmores Limited (ASX: BKL).
The market had been anticipating this and it probably is one of the reasons why Blackmores shares have rallied so strongly in recent days. We could see more profit taking today.
There has been a rush by listed companies to raise capital recently and that's good news for the earnings of stock exchange operator ASX Limited (ASX: ASX). The amount of equity raised jumped 120% in August to $7.1 billion when compared to the same time last year, according to Bloomberg.
Milk supplier FONTERRA ORD UNIT (ASX: FSF) might also finally be catching a break as whole milk powder prices bounced and Westpac Banking Corp (ASX: WBC) raised its forecast 2015-16 payout to $NZ4.30.
Coincidentally, furniture and electrical retailer Harvey Norman Holdings Limited (ASX: HVN) made a $34 million investment in dairy company Coomboona Holdings recently.
Finally, Rio Tinto Limited (ASX: RIO) is likely to remain in the spotlight after its bullish presentation yesterday forecasting a lack of supply for iron ore even as demand from China slows. Rio Tinto's US-listed shares advanced 1.1% overnight.
