November 19, 2010 / 1:40 PM / in 7 years

CORRECTED - CANADA STOCKS-TSX set to open lower on China tightening

(Corrects headline to show China move was to hike bank reserve requirements not rates)

Nov 19 (Reuters) - Toronto’s main stock index looked set to open lower on Friday after news of China’s central bank taking steps to battle inflation by raising bank reserve requirements hit market sentiment globally.

FACTORS TO WATCH

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

* U.S. stock index futures were lower on Friday after China’s central bank took steps to battle inflation. [.N]

* European shares were down around midday, as China’s central bank decision to raise banks’ required reserves felled worries over the country’s appetite for commodities, which hit mining stocks. [.EU]

* Asian markets were mixed with Nikkei gaining, propelled by hedge fund inflows from overseas and with a fall in the yen providing additional support.

COMMODITY PRICE MOVES

* The Thomson Reuters-Jefferies CRB index .CRB, a global commodities benchmark, fell 0.38 percent in early trade.

* Oil prices remained above $82 a barrel, recovering from a brief dip after China increased banks’ reserve requirements by 50 basis points for the second time in two weeks. [O/R]

* Gold prices climbed in Europe, building on the previous session’s gains, as expectations that Ireland is near a multi-billion euro deal to help its beleaguered banks lifted the euro. [GOL/]

* Copper rose, extending the previous session’s gains, helped by a weaker dollar against the euro as talk of a multi-billion euro deal for Ireland boosted sentiment. [MET/L]

CANADIAN STOCKS TO WATCH

* Russel Metals (RUS.TO): The company, which distributes steel and tubular products for the energy industry, said on Thursday unionized employees at five plants in British Colombia had ratified a five-year contract agreement. [ID:nN18118623]

* Adriana Resources Inc. ADI.V: China’s Wuhan Steel has signed an initial agreement with the company to develop an iron ore project in Canada, the 21st Century Business Herald reported on Friday. [ID:nTOE6AI01W]

ANALYST RECOMMENDATIONS

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

* Wajax Income Fund WJX_u.TO rating cut to outperform from strong buy at Raymond James

$1=$1.02 Canadian Reporting by Kishan Nair and Bangalore Newsroom; editing by Jeffrey Hodgson

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