January 18, 2011 / 1:38 PM / in 7 years

CANADA STOCKS-TSX may open higher with commodities firm

Jan 18 (Reuters) - Canadian stocks looked set to open slightly higher on Tuesday, helped by firm commodity prices, with the Bank of Canada widely expected to announce it will hold interest rates steady before the market opens.

FACTORS TO WATCH

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

* The Bank of Canada is widely expected to hold interest rates at 1 percent, with focus primarily on the tone of the accompanying statement. [CA/POLL] [ID:nN25118365]

* The Canadian dollar rose to a two-and-a-half year high against the U.S. dollar on Tuesday as it continued to benefit from firmer oil prices and solid economic fundamentals, with traders citing sovereign demand. [CAD/]

* S&P futures gave up their gains to turn flat on Tuesday after Citigroup Inc (C.N) reported fourth-quarter results. [.N]

* European shares hit a 28-month high on Tuesday, with stronger metals on a weaker dollar and supply worries boosting miners, while automakers advanced on hopes that improving economic outlook will boost vehicle demand. [.EU]

* Asian shares were up on signs of greater global economic growth and positive earnings reports.

COMMODITY PRICE MOVES

* The Thomson Reuters-Jefferies CRB index .CRB, a global commodities benchmark, rose 0.26 percent in early trade.

* Oil slipped on Tuesday after the International Energy Agency (IEA) said OPEC members had been quietly raising output and the oil producing group insisted the market was already amply supplied. [O/R]

* Gold rose for a second day, drawing strength from a weaker dollar and demand from key Asian consumers, along with a degree of uncertainty over a permanent resolution to Europe’s debt crisis. [GOL/]

* Copper rose as the dollar fell and European equities surged to a 28-month high on signs of improving economic growth and better prospects for industrial metals demand. [MET/L]

CANADIAN STOCKS TO WATCH

* Encana Corp. (ECA.TO): The U.S. unit of the company said it will sell its natural gas processing plant in Colorado to Western Gas Partners LP for about $303 million. [ID:nSGE70H08F]

* Gran Tierra Energy Inc. GTE.TO: The company said on Monday it will buy Petrolifera Petroleum Ltd PDP.TO in a $151 million deal that brings together a pair of Canadian-based companies exploring for oil in South America. [ID:nN178894]

* Barrick Gold (ABX.TO): African Barrick Gold, a unit of the world’s biggest gold producer, said fourth-quarter output rose from the preceding quarter as its new Buzwagi mine overcame production difficulties by mid-November, but missed its overall output target for the year. [ID:nLDE70G1L7]

* ProspEx Resources Ltd. PSX.TO: The junior oil and gas explorer said its proved plus probable reserves of oil, natural gas liquids and natural gas have grown 52 percent from a year ago, helped by its central Alberta-based Kakwa natural gas project. [ID:nSGE70H08I]

* Fairborne Energy Ltd. FEL.TO: The oil and natural gas company said it sees a 20 percent rise in its fourth-quarter production. [ID:nSGE70H09J]

* Adriana Resources ADI.V: The company reached a joint venture agreement with a unit of China’s Wuhan Iron and Steel Co Ltd on Monday in the latest in a series of deals in Canada’s iron mining sector. [ID:nN1746670]

ANALYST RECOMMENDATIONS

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

* Baytex Energy BTE.TO target price raised to C$50 from C$48; rating outperform at Raymond James

* Crocotta CTA.TO target price raised to C$2.50 from C$2; rating outperform at Raymond James

* RioCan (REI_u.TO) target price raised to C$23.50 from C$23; rating market perform at Raymond James

$1= $0.99 Canadian Reporting by Kishan Nair and Bangalore Newsroom; editing by Jeffrey Hodgson

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