Morning Market Movers: 13 stocks to watch

The local share market is expected to open sharply lower following steep falls in overseas markets overnight.

US and European shares fell hard after financial pundits failed to correctly guess what the European Central Bank will do with its interest rates and bond buying programs. Despite the ECB adding to and extending its current stimulus, investors were expecting the central bank to announce further cuts to the deposit rate and an increase in its level of its monthly bond buying.

Ordinarily, a central bank refraining from handing out cash and slashing deposit rates would be a good thing, so the selloff appears irrational, in this Fool’s opinion.

The Dow Jones and NASDAQ fell 1.47% and 1.77%, respectively. In Europe, London’s FTSE 100 and the EURO STOXX 50 indices fell 2.3% and 3.6%.

FTSE-listed shares of BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO) fell 3.3% and 3.4%, respectively, with the price of iron ore falling to just $US40.75, according to The Metal Bulletin.

Closer to home, the Sydney Futures Exchange is forecasting a 67 point, or 1.2%, drop in the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO). Fellow iron ore miner Fortescue Metals Group Limited (ASX: FMG) could come under pressure as the price of steel-making ingredient hastily approaches $US40 per tonne.

Energy stocks such as Woodside Petroleum Limited (ASX: WPL), Santos Ltd (ASX: STO) and Oil Search Limited (ASX: OSH) will also be in focus following a 3.4% increase in oil prices overnight.

Many other companies will also see some volatility in their share prices after the S&P Dow Jones Indices announced their quarterly rebalancing today. Slater & Gordon Limited (ASX: SGH), Dick Smith Holdings Ltd (ASX: DSH) and Senex Energy Ltd (ASX: SXY) are three companies removed from their respective indices.

In company-specific news, Telstra Corporation Ltd (ASX: TLS) announced the resignation of retail group executive, Dr Karsten Wildberger, for personal reasons.

In broker news, Macquarie downgraded its price target and investment rating for shares of Spotless Group Holdings Ltd (ASX: SPO), and rated shares of JB Hi-Fi Limited (ASX: JBH) as ‘neutral’; UBS downgraded Collins Foods Ltd (ASX: CKF) to ‘neutral’, according to FNArena.

Our BEST dividend stock pick - FREE!

If you're after fat, fully franked dividends, you won't want to miss this: The Motley Fool has just issued a brand-new report, complete with all the details on our expert analysts' #1 dividend stock for 2015-2016. Simply, click here now for your FREE copy, including the name and code!

Motley Fool writer/analyst Owen Raszkiewicz owns shares of Slater & Gordon.

Owen welcomes your feedback on Google plus (see below), LinkedIn or you can follow him on Twitter @ASXinvest.

Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. 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.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.