Financial services provider CMC Markets said it expects mining companies to boost their dividends in the upcoming earnings season as fast-growing emerging markets continue to push commodity prices higher.
"Emerging markets and improved global economic conditions should continue driving commodities prices, leading to plenty of upside for mining companies," CMC markets analyst Ben Le Brun said.
He said although fears remained about the impact of tighter monetary policy in China, investors should remember that any tightening makes the major emerging economy's growth more sustainable.
"Excitement is building around BHP Billiton and Rio Tinto as share buy backs and increased dividends look more likely," he said.
"Investors love increased dividends and if this takes shape I expect further upside in both stocks."
However, he said danger looms for a few retailers as companies like Woolworths have already issued profit warnings.
"It is a case of whether fund managers have been pessimistic enough on stocks that have been sold down lately. Softer consumer spending is an ongoing issue, coupled with weaker than expected Christmas sales," Le Brun said.
"Look for revenue versus earnings per share when dissecting results as you need to be wary of improved operations through cost saving - it does nothing to increase sales, which is what the market really wants to see.
"It will be just as important to analyse future earnings guidance and current market conditions as well as the headline figures - consumer spending in Australia is expected to remain soft."
