June 14, 2011 / 12:30 PM / 6 years ago

CANADA STOCKS-TSX may open higher after strong Chinese data

5 Min Read

June 14 (Reuters) - Toronto's resource-heavy main stock index looked set to open higher on Tuesday after economic data out of China drew investors into equity markets and pushed commodities higher.

China's inflation accelerated in May to a 34-month high of 5.5 percent, while retail sales came in marginally higher than forecast. Although a little above expectations, the inflation data suggested Chinese price rises were not out of control and that growth was being managed. [MKTS/GLOB]

Factors to Watch

* Canadian equity futures <0#SXF:> pointed to a higher open.

* U.S. stock index futures rose after economic data out of China drew investors into an equities market that had become oversold from a technical perspective after six weeks of sharp declines. [.N]

* European shares rose in morning trade after a raft of Chinese data suggested that growth in the world's second-biggest economy was not slowing down too quickly, prompting investors to buy riskier assets. [.EU]

* Markets in Asia were largely high but Hong Kong shares ended lower as market players pared long positions after China announced a sixth hike in banks' reserve requirements this year to drain excess liquidity and tame inflation.

Commodity Price Moves

* The Thomson Reuters-Jefferies CRB index .CRB, a global commodities benchmark, rose 0.01 percent in early trade.

* Crude futures edged higher after the impact of strong economic data from China, the world's second biggest energy consumer, was offset by expectation it might act to prevent the economy overheating. [O/R]

* Gold rallied as the jewelry sector came looking for bargains, the dollar slipped and investors fretted about the Greek debt crisis. [GOL/]

* Copper rose, absorbing another monetary policy tightening move in China, as economic data from the world's top consumer of the metal eased global growth concerns and boosted risk appetite. [MET/L]

Canadian Stocks to Watch

* Sino-Forest TRE.TO: The target of a scathing attack from short-seller Muddy Waters, said that its independent committee's review of the allegations leveled against the company is likely to take two to three months. [ID:nN14147080]

* Bombardier Inc. (BBDb.TO): The company's train unit won a $577 million contract for upgrading the signaling system on four lines of the London Underground network. [ID:nL3E7HE1NX]

* Sherritt International Corp. (S.TO): The diversified miner has pushed back the expected date of the first output from the Ambatovy nickel project to the first quarter of next year and forecast a 16 percent increase in capital costs. [ID:nL3E7HE1PW]

* Air Canada Inc. ACa.TO ACb.TO: The union representing customer service and ticket sales agents at the company have gone on strike after failing to reach a new labour agreement with the country's biggest airline. [ID:nL3E7HE0JF]

* Arise Technologies Corp. APV.TO: The solar technology company posted its first-ever quarterly profit helped by lower costs and higher demand for its technology. [ID:nL3E7HE1WJ]

* IntelGenx Corp. (IGX.V): The biotech firm said its resubmission for approval of an antidepressant drug was classified by U.S. health regulators as a class 2 response, which typically suggests a review period of six months. [ID:nL3E7HE1OO]

* Marsulex Inc MLX.TO: The company, which provides waste management and recycling services to industries, posted a 40 percent rise in profit, helped by growth at its environmental technologies segment. [ID:nL3E7HD2VJ]

* Timminco Ltd. TIM.TO: The company's first-quarter loss narrowed as higher selling prices for silicon metal and improved shipments of solar grade silicon boosted margins at the Canadian silicon metal producer. [ID:nL3E7HD2OF]

* Vicwest Inc. VIC.TO: The company posted an 11 percent jump in quarterly profit, handily beating estimates, helped partly by higher gross profit margins, but said its growth will be hit by higher raw material prices. [ID:nL3E7HD2VG]

Analyst Recommendations

Following is a summary of research actions on Canadian companies reported by Reuters. [RCH/CA]

* Canadian Tire (CTC.TO) coverage started with outperform rating and price target of C$73 at National Bank

* Eldorado Gold (ELD.TO) rating raised to outperform from neutral at Macquarie

* Enerflex EFX.TO coverage started with sector performer rating; price target of C$17 at CIBC

* Timmins Gold TMM.TO target price cut to C$3.05 from C$3.15; rating outperform at National Bank

$1= $0.97 Canadian Reporting by Kishan Nair; Editing by Jeffrey Hodgson

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