A late rally in the US market won’t be enough to keep our market rallying for a third day as commodities and European stocks slid into the red last night.
The futures market is pricing in a 0.7% fall for the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) as investors were unimpressed with the 0.2% gain by the US S&P500 because the late bounce in the index was solely due to a small handful of mega-cap stocks like Apple and Microsoft.
There is also perhaps a bit of buying fatigue on our market following the 3.9% recovery over the past two days after the ASX200 crashed to a more than two-year low.
Investors are also reluctant to do much ahead of the all-important US jobs report that’s due out late tonight, which will have a direct impact on the US Federal Reserve’s interest rate decision at the end of this month.
Then there’s the 1.9% tumble in the copper price to $US2.2970 a pound and the 0.5% decline in the iron ore price to $US56.04 a tonne that will likely weigh on the miners, but copper miner OZ Minerals Limited (ASX: OZL) will take centre stage again on media reports speculating on private equity firm KKR’s intentions for the miner after it bought a 10% stake in OZ Minerals yesterday.
KKR believes OZ Minerals, which is sitting on Australia’s largest undeveloped copper deposit, is undervalued and it will be pushing for the board to make certain changes to unlock shareholder value following the stock’s 17% plunge since May.
Don’t rule out a full hostile takeover bid if KKR doesn’t get its way.
Meanwhile, the battle to buy steel maker Arrium Ltd’s (ASX: ARI) consumables business Moly-Cop is heating up with the Australian Financial Review reporting that private equity firm Pamplona Capital Management has expressed interest in bidding for the unit.
It is facing competitors like Blackstone Group and TPG who are also keen on buying the business.
The acquisition news trail doesn’t stop there. Global media conglomerate News Corp (ASX: NWS) is expanding further into the digital space with the acquisition of San Francisco-based Reesio, an online real estate document, transaction mgmt/collaboration platform. No financial details were provided.
Aged care facilities operator Japara Healthcare Ltd (ASX: JHC) is also expanding through acquisitions with its $79.5 million buyout of the Profke residential aged care portfolio, which will add 587 beds in Queensland and New South Wales.
We will bring you details and analysis on what the deal means later today.
Meanwhile, gas pipeline company APA Group’s (ASX: APA) attempted buyout of Energy Australia’s Iona gas plant suffered a setback with the Australian Competition and Consumer Commission (ACCC) raising concerns about the deal having a negative impact on competition.
The ACCC is delaying its decision on whether to grant approval for the acquisition to November 5 as it waits for further submissions from stakeholders.
In other news, telecommunications services group TPG Telecom Ltd (ASX: TPM) may come under pressure after its strong run and $1 billion tie-up with Vodafone, after Credit Suisse downgraded the stock to “underperform” with a price target of $9 a share.
Oil companies like Woodside Petroleum Limited (ASX: WPL) could also be under the pump today on the back of a 1% drop in the West Texas Intermediate crude price to $US44.63 a barrel.
It’s not the best way to end the week, but at least the ASX 200 will end above the psychologically important 5,000 level. In this volatile market, we should count all our small blessings.
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Motley Fool contributor Brendon Lau owns shares of TPG Telecom Limited and Woodside Petroleum Ltd.. Follow me on Twitter - https://twitter.com/brenlau
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