TORONTO, May 5 (Reuters) - Toronto’s main stock index may dip at the open on Tuesday as underlying weakness in commodity prices may prompt the energy and materials groups to fall.
The TSX may also take cues from U.S. stock index futures, which pointed to a slightly lower open on Tuesday with investors set to take profits after a recent runup. [ID:nN05453425]
The S&P/TSX composite index .GSPTSE ended Monday’s session up 373.41 points, or 3.93 percent, at 9,870.37, its highest level since Nov. 10. The index is up 30 percent since early March.
Meanwhile, world stocks raced to their highest level in almost four months. [ID:MKTS/GLOB]
Here are some of the factors that may affect the market.
Oil eased towards $54 a barrel as forecasts that U.S. crude inventories probably rose from their highest level in almost two decades countered optimism about economic recovery. The pullback came a day after a series of positive economic indicators lifted oil to $54.64 in post-settlement trade, just shy of its 2009 high. [ID:nSP351504]
Gold dipped, reversing earlier small gains, as firmer equity markets and a recovery in the dollar weighed on the precious metal. However, caution ahead of the results of U.S. bank stress tests later this week and worries over the inflation outlook are continuing to support the metal. [ID:nL5940538]
Magna International Inc MGa.TO said on Monday it was in talks with General Motors Corp (GM.N) and German government officials about possibly taking a minority stake in GM’s Opel unit. The Canadian auto parts supplier said there was no assurance that any transaction would result from the talks. [ID:nN04427571]
* See also: Opel labor leader says Fiat deal risks everything [ID:nWEA0237]
Linamar Corp (LNR.TO) reported a quarterly loss on Monday as the auto industry’s global slump slashed demand for its parts, but it said it was picking up market share and on track with plans to cut costs and pay off debt. [ID:nN04422796]
* RBC raises Linamar price target to C$6 from C$4; rating outperform [ID:nWNAB3223]
The results of the regulatory stress tests for the top 19 U.S. banks will be publicly disclosed on May 7. A source familiar with official talks said U.S. regulators have deemed that about 10 of the 19 U.S. banks being stress tested will need to raise more capital. [ID:nN04553413]
U.S. central bank chairman Ben Bernanke will testify on the economy before the Joint Economic Committee at 10:00 a.m. (1400 GMT). Investors will be keen for any new indication the recession is easing.
* See also: Two Fed officials see recession ending this year [ID:nN04419645]
Following is a summary of research actions on Canadian companies reported by Reuters on Tuesday. For more, see [ID:CA/RCH]
* Desjardins cuts Inmet Mining IMN.TO to hold from buy on valuation; price target of C$47.30
* Barclays cuts Canadian Natural Resources (CNQ.TO) to equal weight from overweight
* Genuity raises price target for AGF Management (AGFb.TO) to C$11 from C$7.50
$1=$1.17 Canadian Reporting by Ka Yan Ng, Editing by Chizu Nomiyama