December 7, 2010 / 1:51 PM / in 7 years

CANADA STOCKS-TSX set to open higher on commodity price jump

Dec 7 (Reuters) - Toronto’s resource heavy main stock index looked set to open higher on Tuesday, buoyed by rallying commodity prices and expectations the Bank of Canada will hold interest rates steady.

FACTORS TO WATCH

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

* U.S. stock index futures rose after U.S. President Barack Obama forged a compromise with Republicans to extend Bush-era tax breaks for two years. [.N]

* All 44 forecasters polled by Reuters expect the Bank of Canada to keep interest rates on hold at 1 percent on Dec. 7, but they were divided on the timing of the next hike in 2011. [CA/POLL] [ID:nN02172937]

* European shares hit a 26-month high, with commodity issues gaining on strong crude and metals prices and as a deal to extend U.S. tax cuts helped lift confidence in the economy. [.EU]

* Asian markets were largely up, but Nikkei edged lower as stronger yen encouraged investors to book profits.

COMMODITY PRICE MOVES

* The Thomson Reuters-Jefferies CRB index .CRB, a global commodities benchmark, rose 0.87 percent in early trade.

* Oil rose above $90 a barrel for the first time in 26 months as the dollar fell and the freeze in Europe and the United States stoked fuel demand. [O/R]

* Gold hit record highs for a second successive day, driven by fund buying ahead of the end of the year, the prospect of more U.S. monetary easing and investor nervousness over the European debt crisis. [GOL/]

* Copper rallied to a record high above $9,000 a tonne on rising demand expectations for 2011 against a backdrop of tight supply, while a softer dollar against the euro triggered a burst of short-covering. [MET/L]

CANADIAN STOCKS TO WATCH

* Toronto-Dominion Bank (TD.TO): The bank is in talks to buy Chrysler Financial Corp, the auto loans company owned by private equity firm Cerberus Capital Management LP, Bloomberg reported on Monday, citing three people with knowledge of the matter. [ID:nN06245201]

* Bank of Montreal (BMO.TO): Canada’s fourth-largest said on Tuesday its fourth-quarter profit rose 14 percent, helped by a strong performance in the bank’s personal and commercial banking unit. [ID:nN07264531]

* Precision Drilling Corp. (PD.TO): The oil and gas driller said on Monday it will nearly double its capital spending in 2011 to C$405 million as the company builds new rigs and upgrades its existing fleet. [ID:nN06215104]

* Petrominerales Ltd. PMG.TO: The Latin America-focussed oil producer said it successfully drilled a second well in Yenac in Colombia. [ID:nSGE6B607I]

* Azure Dynamics AZD.TO: Ford Motor’s Transit Connect commercial vans refitted to run on electric power by Azure have begun shipping to customers in North America and Britain, the companies said on Monday. [ID:nN06205165]

ANALYST RECOMMENDATIONS

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

* Cameco Corp (CCO.TO) price target raised to C$37.20 from C$33; keeps market perform rating at Raymond James

* First Uranium FIU.TO price target raised to C$1.80 from C$1.70; keeps outperform rating at Raymond James

* Paladin Energy PDN.TO price target raised to C$7.10 from C$5.60; rating outperform at Raymond James

* Platinum Group Metals Ltd PTM.TO price target raised to C$3.20 from C$3; keeps strong buy rating at Raymond James

* Precision Drilling Corp (PD.TO) rating cut to market perform from outperform at Raymond James

* Uranium One UUU.TO price target raised to C$6 from C$4.70; keeps market perform at Raymond James

$1= $1.00 Canadian Reporting by Kishan Nair and Bangalore Newsroom; editing by Jeffrey Hodgson

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