March 12, 2012 / 12:32 PM / 5 years ago

CANADA STOCKS-TSX may open lower on weak Chinese data

March 12 (Reuters) - Canada's resource-heavy main stock index looked set to open lower on Monday, hurt partly by a drop in commodity prices after weak trade data from China.

China's trade balance plunged $31.5 billion into the red in February as imports swamped exports to leave the largest deficit in at least a decade and fuel doubts about the extent to which frail foreign demand or seasonal distortion drove the drop.

FACTORS TO WATCH

* Canadian equity futures pointed to a lower open.

* U.S. stock index futures were little changed as economic data in China gave investors reason to pause after a 3-day rally.

* European stocks reversed early losses and turned slightly positive, reviving a three-session rally as investors shrugged off grim Italian GDP data and the triggering of Greek credit default swaps to chase euro zone banking stocks higher.

* China will encourage the value of its yuan currency to be set by the market and step back from intervention "in an orderly manner", while keeping policy flexible to support credit growth in the face of volatile capital flows, the central bank said.

COMMODITY PRICE MOVES

* The Thomson Reuters-Jefferies CRB index, a global commodities benchmark, fell 0.72 percent in early trade.

* Oil prices fell, snapping four days of gains as worries over supplies from the Middle East eased and investors focused on the health of the global economy and fuel demand

* Gold edged lower after equities reversed gains and the U.S. dollar rallied to the highest in more than a month, but some investors opted to stay on the sidelines ahead of a U.S. Federal Reserve meeting this week that could weigh on the precious metal.

* Copper eased due to concern about over-supply and demand in commodity-consuming giant China, although optimism generated by forecast-beating U.S. jobs data limited losses.

CANADIAN STOCKS TO WATCH

* Viterra : Commodities and mining giant Glencore has made a 3.5 billion pound approach for the grain handler, Britain's Sunday Telegraph newspaper said on its website on Saturday.

Separately, U.S. agribusiness giant Cargill Inc is one of the parties interested in acquiring Viterra, the WSJ reported on its website on Sunday citing people familiar with the matter.

* Air Canada : The Canadian government is preparing back-to-work legislation for the airline so that it can respond quickly if there is any work stoppage at the airline, the government said on Friday.

* Mercer International Inc. : The pulp producer said the Court of Québec has reversed a cease trade order against a private placement of special warrants by Fibrek Inc to Mercer.

ANALYST RECOMMENDATIONS

Following is a summary of research actions on Canadian companies reported by Reuters.

* Altagas : CIBC starts with a sector outperformer rating

* Canadian Pacific : Canaccord Genuity raises target to C$90 from C$89, rating buy

* Capstone Infrastructure : National Bank cuts to underperform from sector perform

* Gildan Activewear : National Bank Financial raises target to C$32 from C$28

* Great Basin Gold : BMO cuts to market perform

* Neo Material Technologies Inc. : Canaccord Genuity cuts to hold from buy

* Pacific & Western : Canaccord raises target to C$2.50 from C$1.60

* Savanna Energy : Canaccord cuts target price to C$11 from C$11.25, rating buy

* Scott's Real Estate : CIBC cuts price target to C$5 from C$5.50

* Xinergy : Canaccord Genuity raises price target to C$2.60 from C$2.20, rating hold

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