CANADA STOCKS-TSX may open lower after Chinese rate hike

Wed Jul 6, 2011 8:53am EDT
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July 6 (Reuters) - Toronto's main stock index looked set to open lower on Wednesday as risky assets stayed under selling pressure after China raised its official interest rate, stoking concerns the tightening may dampen the outlook for the global economy.

China's central bank increased interest rates for the third time this year on Wednesday, making clear that taming inflation is a top priority as its economy gently slows. [ID:nB9E7EM01R]

And caution over the euro zone debt crisis resurfaced after Moody's cut the credit rating for Portugal by four notches to non-investment grade, warning the country may need a second round of rescue funds before it can return to capital markets. [ID:nN1E764185]


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

* U.S. stock index futures fell after Moody's downgrade of Portugal's credit rating to "junk" and China's interest rate rise triggered unease about global growth prospects. [.N]

* European equities retreated as banking stocks slipped after Moody's cut Portugal's credit rating to 'junk' and said the highly indebted country may need more bailout funds. [.EU]

* Asian stocks were mixed with Japan's Nikkei rising to a post-quake high, gaining for a seventh session in its longest winning streak in two years, helped by continued buying by Asian and European investors.