Following a 0.5% drop in US and European markets on Friday, the local S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) is expected to start the day lower. The Sydney Futures Exchange SPI 200 is pointing to a 0.4% drop.
The RBA is expected to keep official interest rates on hold tomorrow. However, today's softer open comes despite growing expectations of a rate cut this week, following the 'Big Four' banks' decision to raise their variable mortgage rates last fortnight.
Westpac Banking Corp (ASX: WBC), Australia's second-largest bank, announced a full-year cash profit of $7.8 billion, up 2% on the year prior. Despite some weaker results in parts of the group, Westpac's CEO, Brian Hartzer, said he was positive on the bank's growth outlook as the economy transitions to non-mining sectors.
"While consumers remain cautious, there are signs of improvement in non-mining related investment as the economy shifts to being more service sector-driven," He said. The bank declared a final dividend of 94 cents per share.
Last week, Australia and New Zealand Banking Group (ASX: ANZ) and National Australia Bank Ltd. (ASX: NAB) both announced a modest uptick in cash profits but were heavily sold down by the market.
Leading online property listing site, REA Group (ASX: REA), announced it would acquire all the shares of its smaller Asian equivalent, iProperty Group Ltd (ASX: IPP). The owner of realestate.com.au is offering $4 per share cash for every iProperty share it does not already own. Shares of the $650 million iProperty Group closed Friday at $3.51 per share, so the deal represents a premium of just 14%.
"The acquisition of iProperty is the logical extension of REA's market leading business in Australia and marks the next step in its strategy to pursue strategically sound expansion into attractive markets," the company said.
Oil and gas stocks such as Woodside Petroleum Limited (ASX: WPL) will also be in focus, following a healthy uptick in commodity prices at the weekend.
