Australian Stock Market Leads - 03/02/2012
The Australian stock market is off to a slow start on Friday with commodity-related stocks led by Lynas Corp (ASX: LYC), Aquarius Platinum Ltd (ASX: AQP), Atlas Iron Ltd (ASX:AGO) hitting some gains as of 10:00 AM (AEST).
Analysts are predicting a rebound for commodities-related stocks today after taking a beating on Thursday's trade with copper falling over 1.0% and oil down 1.9%, stemming from U.S. Fed chairman Ben Bernanke's comments on U.S. jobless claims.
IG Markets analyst Stan Shamu notes that the news on Xstrata and Glencore mulling a tie-up will provide a boost to the commodities and mining-related stocks.
"BHP's ADR is suggesting the stock will open 0.4% higher. The 2012 rally in gold continued as the precious metal rose for the third straight day and traded to a two-month high. As a result, gold companies are likely to remain in focus. The junior gold miners with low cost operations will continue to be in favour," explains Mr Shamu.
Industrial stocks led by James Hardie Industries (ASX: JHX) and Goodman Fielder (ASX: GFF), and Boral Ltd (ASX: BLD) are also gathering some early morning gains.
Market analyst Ben Le Brun from OptionsXpress by Charles Schwab, points out that the market needs to watch out for the future plans of Wesfarmers and Woolworths.
"Both still pay an excellent dividend and are generating good revenue. However, both will probably come to the realisation that instead of fighting a deflationary war against each other here, the way to go for growth is to look more aggressively offshore in Asia," Mr Le Brun says.
He says that "the deflationary impact had been crimping margins and if you add spending on advertising budgets to the mix then the impact on Woolworths' and Coles' bottom line is enormous."
He cites that "both conglomerates also need to address concerns in the discretionary side of their businesses. Woolworths have announced a rethink at Big W while Wesfarmers need to address their strategies at Kmart & Target."