January 20, 2010 / 1:50 PM / 9 years ago

CANADA STOCKS-TSX may open lower on weak commodities; China eyed

TORONTO, Jan 20 (Reuters) - Toronto’s main stock index could open lower on Wednesday as weak commodity prices hurt energy and metals producers given fresh evidence of tightening credit policy in China and a stronger U.S. dollar.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE could also follow U.S. futures lower, weighed by China’s uncertain demand outlook and earnings reports from a host of U.S. banks that increased uneasiness about the state of financial companies. [.N]

Canadian stocks closed slightly higher on Tuesday as an uptick in bullion prices helped push up gold producers, but the move higher was offset by the drag of some falling blue chips.

Here is some of the news that may affect the market:


Chinese authorities ordered some big banks to curb lending for the rest of January, intensifying their efforts to prevent the world’s third-largest economy from overheating. [ID:nTOE60J09N]


Oil slipped below $78 a barrel on fresh evidence of tightening credit policy in China, a stronger dollar and expectations that U.S. refiners processed less crude in the latest week. [O/R]


Gold prices also gave way to unfavorable currency fundamentals, dropping some 0.8 percent to fall below $1,130, with dollar strength sapping the metal’s appeal to non-U.S. investors. [GOL/]


Bank of America Corp (BAC.N) reported a wider-than-expected quarterly loss of $5.2 billion, hurt by still-high loan losses and its repayment of U.S. government bailout aid. [ID:nN19230402]


Higher gasoline prices pushed Canada’s annual inflation rate to a 10-month high in December, but the data is unlikely to knock the Bank of Canada off track in its pledge to hold interest rates steady for some time. [ID:nN20125463]


Manitoba Telecom Services Inc MBT.TO said a court ruled that the company make a C$43 million one-time payment in a pension lawsuit, and said this could lead to a one-time future payment totaling C$100 million. [ID:nSGE60J04M]


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

* Barclays raises Canadian Natural Resources Ltd (CNQ.TO) price target by C$10 to C$93; rating “overweight”

* Scotia raises Niko Resources (NKO.TO) price target to C$110 from C$105

* Barclays cuts EnCana Corp (ECA.TO) to “equal weight” from “overweight”

* RBC raises Biovail BVF.TO Corp price target to $17 from $16, rating “outperform”

* UBS raises Teck Resources Ltd TCKb.TO price target to C$48 from C$41; rating “buy”

$1=$1.05 Canadian Reporting by Claire Sibonney; Editing by Jeffrey Hodgson

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