Australian equities will struggle to keep their head above water as a slump in commodity prices has more than offset mild gains on Wall Street last night.
The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) is expected to dip slightly into the red as resource stocks are likely to drag on the back of China's gross domestic product (GDP) data.
While GDP growth of 6.9% was a touch ahead of expectations, factory output was weak and that was what commodity traders focused on with the West Texas Intermediate oil price crashing 2.5% to $US46.09 a barrel and copper slipping 1.7% to $US2.3625 a pound.
It won't be a good day for energy stocks like Santos Ltd (ASX: STO), although iron ore producers like Fortescue Metals Group Limited (ASX: FMG) will not only have to contend with the weaker ore price but with news that Brazilian giant Vale is ramping up production of the steel-making commodity in an oversupplied market.
A handful of resource stocks will also be in the spotlight as they hand in their quarterly production reports. Gold miner Newcrest Mining Limited (ASX: NCM) will report its first quarter output and PNG-focused energy producer Oil Search Limited (ASX: OSH) is expected to unveil its third quarter figures.
It won't all be about resources today though. Where our market finishes will probably depend on how the Big Bank stocks like Commonwealth Bank of Australia (ASX: CBA) and Westpac Banking Corp (ASX: WBC) react to the federal government's expected response to the Financial Services Inquiry's recommendations.
The recommendations from the inquiry include tougher rules governing the Big Four and opening the superannuation system to greater competition.
This means shareholders in listed wealth managers like AMP Limited (ASX: AMP) will also be keenly watching developments in this space.
Meanwhile, Sydney Airport Holdings Ltd (ASX: SYD) will have its chance to extend its record run as it benefits from the inbound tourism boom.
The operator of Australia's largest airport is expected to announce its September passenger traffic numbers and I am expecting another solid result following a string of strong monthly increases in the number of passengers flowing through its terminal.
Broker recommendation changes will also likely impact on a few stocks today. Credit Suisse has downgraded port and rail operator Asciano Ltd (ASX: AIO) by two notches to "underperform" from "outperform" and the news comes at a time when Asciano is already under pressure on doubts about whether Brookfield can complete the takeover of the company.
On the flipside, building materials company CSR Limited (ASX: CSR) could find support after RBC Capital upgraded the stock to "outperform" from "sector perform" following the stock's 28% drop since the start of January.
