TORONTO, Jan 20 (Reuters) - Toronto’s key stock index could open lower on Tuesday as a slide in commodity prices and news that Suncor Energy is cutting its 2009 spending threatens to weigh on the resource heavy index.
Canada is a key exporter of oil and gold, so a drop in the price of these commodities could dictate the overall index’s move in Tuesday’s session as the energy and materials sectors make up about 40 percent of the overall index.
The Canadian November manufacturing data due out at 8:30 a.m. (1350 GMT) is not expected to have much of an impact on investor sentiment as it will be followed 30 minutes later by the Bank of Canada’s interest rate announcement.
The central bank is widely expected to cut its benchmark rate by at least 50 basis points, so investors will be watching the accompanying statement very closely to get an idea of the bank’s outlook going forward.
The S&P/TSX composite index .GSPTSE is coming off a drop of 78.92 points, or 0.88 percent, during Monday’s session when weakness in commodity prices pulled down energy and gold-mining issues.
Here is some of the news that may affect the index:
Suncor Energy Inc (SU.TO), Canada’s second-largest oil sands producer, on Tuesday posted a quarterly loss and said it will halve its 2009 spending plan to C$3 billion ($2.38 billion). [ID:nBNG347039]
Oil fell $3, sliding below $34 a barrel after Russia and Ukraine agreed a deal on Tuesday leading to the resumption of gas supplies to Europe, while gloomy economic news presaged weaker demand for oil products. [ID:nSP284892]
GOLD FALLS, STRONG U.S. DOLLAR KNOCKS METAL‘S APPEAL
Gold fell in Europe on Tuesday as the dollar strengthened against the euro, denting the precious metal’s appeal as an inflation hedge, and oil prices tumbled nearly 10 percent. [ID:nLK96167]
Research in Motion Ltd RIM.TO was considering its options after a court blocked its C$66 million hostile takeover offer for Certicom Corp CIC.TO, the Blackberry maker said on Monday. [ID:nN19376172]
Canfor Corp (CFP.TO) will idle five of its western Canadian sawmills for one week this month because of weak lumber markets, the company said on Monday. [ID:nN19376525]
HudBay Minerals (HBM.TO) began a defense of its controversial C$550 million ($440 million) bid for fellow base metals producer Lundin Mining (LUN.TO) on Monday, trying to prevent a key shareholder vote that many think would scuttle the deal. [ID:nN19372227]
Following is a summary of research on Canadian companies. For more, please see [RCH/CA]
* RBC cuts Dorel Industries (DIIb.TO) price target 10 percent to C$36 with “outperform” rating
* Canaccord Adams cuts Newalta (NAL.TO) price target 34 percent to C$9.25 with “buy” rating
* Dundee cuts SFK Pulp Fund SFK_u.TO price target 75 percent to 50 Canadian cents with “sell” rating
$1=$1.26 Canadian Reporting by Frank Pingue, Editing by Chizu Nomiyama