Investors will have plenty of reasons to smile today as the Australian market is expected to jump towards the elusive 6,000 point mark on the back of stronger iron ore prices and positive leads from US and European equities.
The futures market is expecting the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) to rise two thirds of a percentage point to 5,973 and all that's needed is another upbeat day tomorrow for the index to break above the psychological 6,000 barrier that has capped our market for more than seven years.
The market charge will again be led by iron ore stocks, which have made a strong comeback since BHP Billiton Limited (ASX: BHP) said it would postpone its Port Hedland expansion project. The decision triggered a bounce in the iron ore price with the Metal Bulletin reporting a 5.5% jump in the iron ore price to $US57.81 a tonne on Friday evening.
The iron ore market has entered a bull market as the steel making ingredient marked its third session of gains.
BHP is expected to enjoy a strong rally today followed by Rio Tinto Limited (ASX: RIO), but it's their rivals with higher production costs that will likely see the best gains today. This includes Fortescue Metals Group Limited (ASX: FMG), BC Iron Limited (ASX:BCI) and Mount Gibson Iron Limited (ASX: MGX).
However, most of the market attention will be in the telecommunications space with M2 Group Ltd (ASX: MTU) triggering a bidding war for iiNet Limited (ASX: IIN). The Australian Financial Review reported that M2 is offering a rival $1.5 billion all scrip bid for iiNet following TPG Telecom Ltd's (ASX: TPM) takeover proposal.
That's good news for iiNet shares but M2 and TPG could face some downward pressure.
The takeover spotlight is also set to fall on free-to-air broadcaster Ten Network Holdings Limited (ASX: TEN) on news reports that pay television company Foxtel is close to buying a 14.9% stake in the company.
Elsewhere, Insurance Australia Group Ltd (ASX: IAG) should build on Friday's 1.4% gain to $5.98 as analysts from Bell Potter and Commonwealth Bank of Australia (ASX: CBA) upgraded their recommendation on the stock from "hold" to a "buy" equivalent.
Law firm Shine Corporate Ltd (ASX: SHJ) is another that should enjoy support today after Moelis & Co initiated coverage on the stock with a "buy" rating and $3.44 price target.
On the flipside, it won't be a good day for gold miners like Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) as the gold price suffered its worst slump in seven weeks when it tumbled 1.6% to $US1,175 an ounce.
