Stocks to watch on the Australian stock exchange early on Tuesday:

BOW – BOW ENERGY LTD – up 0.5 cents, or 0.34 per cent, at $1.465

Coal seam gas explorer and producer Bow Energy will recommend its shareholders accept an improved take-over offer from Arrow Energy.

CEU – CONNECTEAST GROUP – in trading halt, last traded at 48.5 cents

Securities in toll road owner ConnectEast Group are in a trading halt ahead of a vote on a $2.17 billion take-over offeron Tuesday.

CSL – CSL LTD – last traded at $29.02

A shortage of penicillin over coming months could lead to sub-standard care for patients with serious infections.

GNS – GNS LTD – up 1.5 cents, or 9.68 per cent, at 17 cents

A move to cap pay-outs to contractors under the Tasmanian intergovernmental agreement (IGA) is yet another rip-off, federal opposition leader Tony Abbott says.

QAN – QANTAS AIRWAYS LTD – last traded at $1.42

International air travellers should get to airports early on Tuesday, with industrial action set to cause delays.

WES – WESFARMERS LTD – up 62 cents, or 2.1 per cent, at $30.47

Fitch Ratings has revised Wesfarmers Ltd’s outlook to “positive” from “stable” because of the growing contribution from Coles and the company’s improving financial profile.

WPL – WOODSIDE PETROLEUM LTD – down $1.57, or five per cent, at $29.80

Production has started on Woodside Petroleum’s Okha floating vessel that is expected to produce 30,000 barrels of oil a day.

WOW – WOOLWORTHS LTD – up 20 cents, or 0.81 per cent, at $24.77

Supermarket giant Woolworths says it still expects to lift net profit in the current year but admits the retail sector faces significant challenges.

VBA – VIRGIN BLUE HOLDINGS LTD – up one cent, or 3.3 per cent, at 31 cents

AIZ – AIR NEW ZEALAND LTD – up one cent, or 1.2 per cent, at 87 cents

Air New Zealand has increased its stake in Virgin Australia to just under 20 per cent as part of a strategy to boost its presence in the region.