February 18, 2011 / 1:40 PM / 6 years ago

CANADA STOCKS-TSX may open lower on falling commodity prices

5 Min Read

Feb 18 (Reuters) - Toronto's main stock index looked set to open lower on Friday, with commodity prices pressured by China's decision to hike banks' required reserves, the latest move by the world's biggest consumer of resources to curb inflation.

Factors to Watch

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

* The Canadian dollar edged higher against the U.S. dollar morning after data showed Canada's annual inflation rate eased. [CAD/]

* U.S. stock index futures edged lower after recent advances pushed indexes to multi-year highs and as Wall Street eyed a third week of gains.[.N]

* European shares were flat, hovering near 29-month highs at midday, with miners among the worst performers after China raised banks' reserve requirements by 50 basis points.[.EU]

* In Asia, Hong Kong stocks rose, posting their biggest weekly returns in three months, as another session of healthy turnover suggested investors were growing in confidence.

Commodity Price Moves

* The Thomson Reuters-Jefferies CRB index .CRB, a global commodities benchmark, fell 0.21 percent in early trade.

* Oil prices moved lower after China increased lenders' reserve rates, although a background of continued geopolitical tension in the Middle East and North Africa lent support. [O/R]

* Gold hit five-week highs in Europe and silver its strongest since 1980 as growing unrest in the Middle East lifted interest in precious metals, though another reserve requirement hike from China curbed gains. [GOL/]

* Copper eased, with prices showing some signs of fatigue after this week's run to a record high with rising stocks also pressuring the red metal although the longer-term outlook remains positive. [MET/L]

Canadian Stocks to Watch

* Cenovus Energy Inc. (CVE.TO): The independent oil producer's fourth-quarter production at its Foster Creek and Christina Lake oil sands rose 12 percent and said its proved bitumen reserves at end 2010 were up 33 percent. [ID:nL3E7DI12J]

* Eldorado Gold (ELD.TO). The gold miner said on Friday its fourth-quarter profit rose, driven by a higher gold price and increased production.

* Fairfax Financial Holdings (FFH.TO): The insurer said on Thursday it fell to a fourth-quarter loss as its stock and bond portfolios were hurt by rising interest rates and a decision to hedge investments. [ID:nN1695187]

* West Fraser Timber Co Ltd. (WFT.TO): The softwood lumber producer increased its dividend on Thursday as growing lumber sales to China helped it return to profit in the fourth quarter. [ID:nN16179704]

* Superior Plus Corp. (SPB.TO): The diversified business company posted a third consecutive quarterly loss on a weak U.S. housing market, and cut quarterly dividend and its full-year outlook. [ID:nSGE71F08W]

* Russel Metals RUS.TO: The metals processing and distribution company reported a return to fourth-quarter profit on Thursday, thanks to strong sales and rising steel prices. [ID:nN16180454]

* Transcontinental Inc. (TCLa.TO): The commercial printer said it has doubled its marketing services to Canadian Tire Corp (CTC.TO) (CTCa.TO) in a deal worth "several hundred million dollars." [ID:nL3E7DH2IB]

* Wi-LAN Inc. WIN.TO: The patent licensing company on Friday said it agreed to end all litigation with British chipmaker CSR Plc out of court. [ID:nSGE71H06P]

Analyst Recommendations

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

* Batero Gold BAT.V target price raised to C$7.50 from C$6.25; rating speculative buy at Canaccord Genuity

* Bombardier (BBDb.TO) price target raised to $7.50 from $6.50; rating buy at TD Newcrest, price target raised to C$8 from C$6.50; rating outperform at Stonecap

* Candente Copper DNT.TO coverage resumed with outperform rating at Stonecap Securities

* Capital Power (CPX.TO) price target raised to C$27 from C$24; rating hold at TD Newcrest

* Inter Pipeline Fund IPL_u.TO price target raised to C$15 from C$14; rating hold at TD Newcrest

* Nexen NXY.TO price target raised to C$29 from C$27; rating buy at TD Newcrest

* Penn West PWT.TO rating raised to buy from hold at TD Newcrest

* Russel Metals RUS.TO price target raised to C$28 from C$24; rating buy at TD Newcrest

* Supremex Inc (SXP.TO) price target raised to C$2.75 from C$2.50; rating hold at TD Newcrest

$1= $0.98 Canadian Reporting by Shrutee Sarkar; editing by Jeffrey Hodgson

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