Hang on tight!
Australian equities are expected to suffer another bout of sharp declines today following yesterday's biggest one-day crash in over two years.
The futures market is pricing in a 0.7% tumble for the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) this morning and that comes on top of the 2.3% pummeling it got on Wednesday.
A string of disappointing earnings news from Australia's favorite blue-chip stocks like the Commonwealth Bank of Australia (ASX: CBA) and Woolworths Limited (ASX: WOW) is contributing to the sour mood on our market that is exacerbated by a fall in US equities overnight.
The big banks will continue to hog the spotlight today with National Australia Bank Ltd. (ASX: NAB) handing in its first half earnings report card this morning as it undertakes a $5.5 billion capital raising and looks to spin-off its UK assets.
NAB won't the only one with an earnings announcement. Wealth management group AMP Limited (ASX: AMP) will be giving a quarterly update as it holds its annual general meeting (AGM), while shopping center owner Scentre Group Ltd (ASX: SCP) reported a 5.8% rise in specialty store sales and stuck to its guidance this morning.
Iron ore producers such as Fortescue Metals Group Limited (ASX: FMG), Rio Tinto Limited (ASX: RIO) and BHP Billiton Limited (ASX: BHP) could find some buying support after the iron ore price rallied for its third consecutive day to over $US60 a tonne.
The Metal Bulletin reported that the commodity surged close to 4% to $US60.89 a tonne, although this is unlikely to quell the bears with UBS joining the chorus of analysts calling for a slump in the steel making ingredient in the second half of this calendar year.
UBS is forecasting the iron ore price to drop to $US45 a tonne.
But there's reason to think that the cycle has bottomed for miners with BHP indicating that acquisitions are back on the agenda. Rio Tinto has given a similar signal recently.
Acquisitions are certainly something BHP's spin-off South32 is looking at to help fuel growth. BHP's shareholders approved the demerger yesterday.
In other merger and acquisition news, the alternative stock exchange to ASX Ltd (ASX: ASX) and to other global exchanges, Chi-X, has put itself on the block with a sale price that could reach around $400 million, according to Bloomberg.
This could give the Singapore Stock Exchange or NAQDAQ OMX Group an entry point into the local market. This won't be good news for the ASX.
Meanwhile, consumer goods financing company FlexiGroup Limited (ASX: FXL) is mulling a bid for Fisher & Paykel Finance, according to The Australian.
Other companies that will be holding their AGM's today include petrol supplier Caltex Australia Limited (ASX: CTX), trading systems company Iress Ltd (ASX: IRE), and Rio Tinto.
