S&P/ASX 200 to rise: 7 shares to watch on Monday

The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) is expected to rise again today based on a positive lead set by international share markets on Friday.

Here’s a quick recap:

  • Dow Jones (USA): up 1.33%
  • NASDAQ (USA): up 2.66%
  • FTSE 100 (UK): up 2.19%
  • DAX (Germany): up 1.99%
  • EURO STOXX 50 (Europe): up 2.52%
  • Shanghai Composite (China): up 1.25%

Local shares ended last week on a positive note and look set to open today’s session higher as well. Although NAB’s latest business conditions index could set the mood in the afternoon, the Sydney Futures Exchange is pointing to a 55 point, or 1.1% rise to 4934 points at the opening bell.

BHP Billiton Limited’s (ASX: BHP) 7.5% rally dominated the news headlines on Friday, and investors will be hoping for further gains today. The iron ore price rose 2.2% to US$42.20 a tonne, according to The Metal Bulletin, while oil prices surged 10% to roughly US$32 a barrel during the latest session, which suggests another big day for the miner.

Investors will also be looking for more gains from Rio Tinto Limited (ASX: RIO) and South32 Ltd (ASX: S32), while energy producers such as Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) will be looking to rebound further as well.

The latest business conditions index from NAB today could also give us more insight into the future direction of interest rates. If business confidence has declined, we could be looking at another interest rate cut some time in 2016, which could spur demand for high-yield dividend-paying shares.

One company that could be targeted is Telstra Corporation Ltd (ASX: TLS), whose share price has rallied in recent sessions, as well as Wesfarmers Ltd (ASX: WES).

In company-specific news, Shine Corporate Ltd (ASX: SHJ) will not return to normal trading conditions today, despite initially saying it would end its voluntary suspension today. The plaintiff litigation company is undertaking a review of its Work In Progress recovery rates and provisioning which could have a material impact on earnings guidance for the 2016 financial year.

The company hopes to be able to commence trading on Friday, 29 January, and I expect its shares will be hit hard when they do resume.


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