The first day of the new month won't bring much joy to investors. Our market is expected to fall in sympathy with the drop in US and European equities as commodities posted mixed performances on Friday.
The futures market is pricing in a 0.5% fall for the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) in early trade with iron ore dropping for the second day but oil staging a big rally.
The 0.8% drop in the steel making commodity to $US61.85 a tonne is likely to weigh on the likes of Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG), although the latter will be struggling more on reports that a Chinese steel official said Fortescue will require an equity injection – an allegation strongly refuted by the miner.
On the other hand, the 4.5% surge in the West Texas Intermediate (WTI) crude oil price to $US60.30 a barrel is likely to light up the share prices of Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL).
Gold miners should also enjoy some support as the price of the precious metal firmed 0.1% to $US1,190 an ounce but Newcrest Mining Limited (ASX: NCM) should get an extra boost as Goldman Sachs upgraded the stock to "buy" from "neutral".
Elsewhere, engineering contractor UGL Limited (ASX: UGL) has issued a market update stating that its $175 million provision for the troubled Ichthys project is "adequate" and management is forecasting revenue of $3.1 billion and underlying earnings before interest and tax of $75 million for the current financial year.
Another stock to watch is liver cancer treatment company Sirtex Medical Limited (ASX: SRX) as the stock comes out of its trading halt following its presentation of its SIRFLOX clinical study to the American Society of Clinical Oncology on the weekend.
Finally, media stocks Southern Cross Media Group Ltd (ASX: SXL) and Ten Network Holdings Limited (ASX: TEN) are expected to come under pressure today with JPMorgan downgrading the former to "underweight" from "neutral" and Morningstar cutting its recommendation on the latter to "sell" versus "hold".
