The Australian market is set for a soft open on weak offshore leads overnight and it will likely be the miners that will be leading the stock market down.
The futures market is pointing to a 0.25% drop in the S&P/ASX 200 Index (Index:^AXJO) (Index:XJO), while the iron ore price staged its best gain in two months to reach $US48.82 a tonne, according to the Metals Bulletin.
UK broker Clarkson said overnight that iron ore is unlikely to fall below $US40 a tonne because iron ore production is already starting to fall meaningfully.
But the jump in the steel making ingredient and the reassuring research note may not be enough to stem another day of selling of iron ore stocks.
UBS has lowered its iron ore price assumptions through to 2019 and downgraded Fortescue Metals Group Limited (ASX: FMG) to "sell" from "neutral" and Standard & Poors (S&P) may downgrade the credit ratings of BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO).
It's not all bad news in the mining sector. UBS upgraded copper and gold miner Independence Group NL (ASX: IGO) and Australia-based gold miner Regis Resources Limited (ASX: RRL) to "buy" from "neutral".
Meanwhile, mining services company Mineral Resources Limited (ASX: MIN) is next in line to play down the impact of the suspension of operations from its client Atlas Iron Limited (ASX: AGO). Mineral Resources told investors that the impact from Atlas is not material.
Logistics company Qube Holdings Ltd (ASX: QUB) issued a similar statement yesterday.
Elsewhere, Bloomberg reports that private equity firm Quadrant is looking to sell 16.7 million shares in APN Outdoor Group Ltd (ASX: APO) through a block sale at $3.31 a share.
We also could see some "switching" in the insurance sector after Credit Suisse upgraded Suncorp Group Ltd (ASX: SUN) to a buy, while Morningstar downgraded Insurance Australia Group Ltd (ASX: IAG) to "hold" from "buy".
