Australian equities are expected to ease this morning as the market digests the change in political leadership and wide spread falls in offshore markets in overnight trade.
Investors will be asking if the "Turnbull factor" be enough to save our economy from a potential recession after Malcolm Turnbull unseated Tony Abbott to become the nation's 29th Prime Minister.
Turnbull is regarded as being more business friendly than his predecessor and could bolster business confidence, which has been hit by the perceived lack of political leadership.
It's not falling commodity prices that are the biggest threat to economic growth in Australia but the lack of confidence.
Turnbull's victory lifted the Australian dollar but we may not see much joy in the immediate future for equities.
The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) is poised to ease 0.4% at the open in sympathy with major US and European stock indices, which fell around 0.5% as investor await the US interest rate decision on Friday night Australian time.
Resource stocks will also be weighed down by the 1.4% drop in the West Texas Intermediate oil price to $US44 a barrel and the 2.2% and 1.5% decline in the copper and iron ore price to $US2.40 a pound and $US58.10 a tonne, respectively.
But there are other reasons to be watching the sector. A broker in the UK upgraded BHP Billiton Limited (ASX: BHP) to a "buy" because of its dividend yield, while the Australian Financial Review reports that an Indonesian conglomerate is giving financial support to an Australian mining executive to bid for Rio Tinto Limited's (ASX: RIO) coal assets in New South Wales.
Oil & gas major Woodside Petroleum Limited (ASX: WPL) is working behind the scenes to drum up support for its takeover bid for Oil Search Limited (ASX: OSH) with The Age reporting that Woodside is lobbying the Papua New Guinea (PNG) government to support its bid.
Oil Search, which is 10% owned by the PNG government, formally rejected Woodside's approach yesterday.
Elsewhere, UK-focused fund manager Henderson Group plc (ASX: HGG) could find support today after Exane BNP Paribas initiated coverage on the stock with an "outperform" recommendation as it calls Henderson its top pick among UK asset managers.
On the flipside, fertilizer and chemicals supplier Incitec Pivot Ltd (ASX: IPL) warned investors that it sees a sharp slowdown in Chinese demand for its products, according to Bloomberg.
But those worried about the impact from Australia's largest trading partner might be comforted by reassurances from Asian-exposed Australia and New Zealand Banking Group (ASX: ANZ), which said it can easily reduce its China exposure.
Meanwhile, a number of companies are looking to raise capital. Vertically integrated steel producer Arrium Ltd (ASX: ARI) is looking to sell high-yielding notes to investors, reports the AFR, while entertainment group Village Roadshow Ltd (ASX: VRL) has raised $480 million to boost film production.
