July 6, 2011 / 12:55 PM / 6 years ago

CANADA STOCKS-TSX may open lower after Chinese rate hike

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]

FACTORS TO WATCH

* 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.

COMMODITY PRICE MOVES

* The Thomson Reuters-Jefferies CRB index .CRB, a global commodities benchmark, fell 0.44 percent in early trade.

* Brent crude oil LCOc1 extended losses and U.S. crude CLc1 moved well into negative territory after China increased interest rates by 25 basis points, increasing worries about prospects for global growth. [O/R]

* Gold prices erased early gains to fall as low as $1,512.29 an ounce after China said it was raising interest rates by 25 basis points, with the dollar rising to session highs against a basket of currencies .DXY. [GOL/]

* Copper dipped after Moody’s downgrade of Portugal’s credit rating revived investor concerns over the euro zone’s debt woes but supply disruptions at some of the world’s top copper mines are expected to keep a floor under prices. [MET/L]

CANADIAN STOCKS TO WATCH

* Embattled Chinese forestry company Sino-Forest TRE.TO said it is postponing a tour of its forestry assets, as some analysts have currently halted coverage of the company. [ID:nN1E76502A]

* Alamos Gold Inc. (AGI.TO): The miner’s second-quarter gold production fell on lower output at its flagship Mulatos mine in Mexico, but the miner maintained its annual production forecast. [ID:nL3E7I61AV]

* Bankers Petroleum Ltd. BNK.TO: The oil and gas company’s second-quarter output from the Patos-Marinza oilfield in Albania was lower than what the company expected as it was forced to shut in production. [ID:nL3E7I601Y]

* SouthGobi Resources Ltd. (SGQ.TO): The coal miner said its unit in Mongolia received a mining license for its Soumber Deposit, located to the east of the company’s flagship Ovoot Tolgoi Mine. [ID:nL3E7I61J0]

* Kirkland Lake KGI.TO: The gold miner posted a quarterly profit helped by higher gold production. [ID:nL3E7I615L]

* DragonWave Inc. DWI.TO: The head of sales at struggling telecom equipment maker has resigned and will leave the company in August, DragonWave said on Tuesday. [ID:nN1E7641NP]

* Mandalay Resources (MND.TO): The metals miner said Walter Energy WLT.TO entered into a deal with BMO Capital Markets to sell a part of its stake in Mandalay on a block trade basis for about C$24 million. [ID:nL3E7I61BA]

* Capstone Mining Corp. (CS.TO): The company said second-quarter production at its Cozamin and Minto mines rose 27 percent sequentially, and it backed its full-year production forecast. [ID:nL3E7I61L3]

ANALYST RECOMMENDATIONS

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

* Rubicon Minerals Corp (RMX.TO) price target cut to C$4 from C$6; rating sector underperformer at CIBC

$1= $0.96 Canadian Reporting by Shrutee Sarkar; Editing by Jeffrey Hodgson

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below