Toronto stocks to ease on commodities, U.S. CPI
TORONTO Dec 14 (Reuters) - The Toronto Stock Exchange's main index was set to drift lower on Friday, hobbled by lower commodity prices and U.S. data that ramped up inflation fears.
After a volatile session on Thursday, the TSX could cue off a bigger-than-expected rise in U.S. consumer prices, seen as reducing the chance of Federal Reserve rate cuts.
The data comes at the end of a week in which major central banks revealed a plan to inject liquidity into drying up money markets, in an effort to stave off a possible recession.
"Unfortunately during this current credit crisis, the solution by our central banks is to create more money, thinking that we have to add more liquidity into the system," said John Ing, president at Maison Placements Canada.
"Well, that has inflationary consequences and we're just beginning to see those consequences."
The Toronto index, which fell 0.45 percent on Thursday, driven down by resource shares.
Commodity prices were soft again on Friday morning. Spot gold dipped more than $4 an ounce and copper sagged on lingering worry over weakening demand. Both could take a bite out of the TSX materials sector.
In Canada's oil patch, Petro-Canada PCA.TO joined rivals EnCana ECA.TO and Husky Energy Inc (HSE.TO: Quote) in boosting spending next year, earmarking C$5.3 billion as it directs cash to long-term projects. For details, see: [nN12441720]
UBS cut its price target for the Petro-Canada stock to C$65 from C$70. Continued...