October 19, 2010 / 12:35 PM / 7 years ago

CANADA STOCKS-TSX may open lower after China hikes rates

Oct 19 (Reuters) - Toronto’s main stock index could open lower on Tuesday after China, the world’s biggest resource consumer, surprised investors with its first increase of interest rates in nearly three years

FACTORS TO WATCH

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

* U.S. stock index futures pointed to a weaker start as Bank of America’s result showed net loss quadrupled from a year ago, while iPad maker Apple’s quarterly sales of the gadget and gross margins came in below expectations [.N]

* Canada’s central bank is expected to hold its key policy rate at 1 percent in its scheduled announcement at 9 a.m. (1300 GMT), while the tone of its statement will be closely followed for further direction. [ID:nN15144891]

* European shares edged up led by industrial and financial stocks [.EU]

* Asian markets were mixed, with weakness in the technology and commodity sectors limiting the gains

COMMODITY PRICE MOVES

* The Thomson Reuters-Jefferies CRB index .CRB, a global commodities benchmark, fell 0.84 percent in early trade.

* Oil fell, retracing part of the previous session’s gain, as the dollar climbed and traders awaited results from U.S. investment banks later in the day for signs of economic strength in the major oil consumer. [O/R]

* Gold held steady near $1,370 an ounce in Europe as expectations for further monetary easing in the United States continued to support prices, though gains in the dollar put the brakes on the metal’s run higher. [GOL/]

* Copper tumbled from highs on Tuesday as top consumer China said it would raise its benchmark lending rate and a stronger dollar weighed. [MET/L]

CANADIAN STOCKS TO WATCH

* Potash Corp. (POT.TO). The CEO of Yara International said that the Norwegian fertiliser firm was open to buying assets from Potash. [ID:nLDE69H07O]

* Premium Brands Holdings Corp. (PBH.TO). The food products maker said it bought specialty sandwich maker SK Food Group Inc for about $42.5 million, the fourth deal this year for the Canadian food products maker. [ID:nSGE69H0N6]

* Exile Resources ERI.V: The junior oil and gas explorer said use of a new, cheaper method to ship crude oil will lead to a delay in first production at its Akepo field development project in Nigeria. [ID:nSGE69H0N2]

ANALYST RECOMMENDATIONS

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

* Denison Mines (DML.TO) rating cut to outperform from strong buy; ups price target to C$2.40 from C$2.30 at Raymond James

$1=$1.02 Canadian Reporting by Bangalore Newsroom; Editing by Jeffrey Hodgson

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