TORONTO, Jan 28 (Reuters) - Toronto’s main stock market could open higher on Wednesday, led by its heavily weighted financial group, as investors await the outcome of the U.S. Federal Reserve meeting.
Investors might also take time to mull Canada’s latest budget after its Conservative government unveiled a two-year C$40 billion ($32 billion) stimulus package on Tuesday to help pull the economy out of recession. [nN27408307]
But weak gold and oil prices could weigh on the resource-heavy market.
Economists say the U.S. central bank will hold the target for official borrowing costs in a range of zero to 0.25 percent and repeat a commitment made last month to maintain “exceptionally low levels of the federal funds rate for some time.”
With the Fed running out of room to cut interest rates, the U.S. central bank is expected to discuss unconventional measures to improve financial market operations, having already said it is weighing the benefits of major purchases or long-dated U.S. government securities.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE finished more than 1 percent higher on Tuesday as optimism ahead of Canada’s budget boosted financial shares and overcame a drag from commodities groups.
Here is some of the news that may affect the index:
The Federal Reserve will resume a key meeting on Wednesday to review options of how to restore U.S. growth, with its traditional interest rate policy tool already lowered almost to zero. [nN27471774]
Oil eased near $41 a barrel on Wednesday before the release of a U.S. government report expected to show a rise in crude stocks in the world’s top consumer. [nN27471774]
Gold slipped more than 1 percent in Europe on Wednesday, extending the last session’s decline, as a firmer tone to equities and the euro showed the risk aversion that pushed bullion to a three-month high was ebbing. [nL1449620]
French oil major Total SA (TOTF.PA) has made an unsolicited C$617 million ($502 million) takeover bid for Canada’s UTS Energy Corp UTS.TO, taking advantage of weak asset prices to try and expand in the oil sands industry. [nLS714427]
BLAST, FIRE DAMAGE PETRO-CANADA ALBERTA REFINERY
An explosion and fire damaged Petro-Canada’s PCA.TO Edmonton, Alberta, refinery late on Tuesday, but the company said no injuries were reported and the plant was still producing some fuels after the blaze was extinguished. [nN28490321]
Following is a summary of research on Canadian companies. For more, please see [RCH/CA] [nBNG389054]
*RBC RAISES NEWMONT MINING CORP (NEM.N) PRICE TARGET TO $40 FROM $33; RATING SECTOR PERFORM
*RBC RAISES METRO INC MRUa.TO PRICE TARGET TO C$44 FROM C$41; RATING OUTPERFORM
*RBC RAISES LUNDIN MINING CORP (LUN.TO) PRICE TARGET TO C$1.30 FROM C$1.24; RATING SECTOR PERFORM
*UBS CUTS CANADIAN PACIFIC RAILWAY (CP.TO) PRICE TARGET TO C$66.00 FROM C$73.00; RATING BUY
*GENUITY RAISES UTS ENERGY CORP UTS.TO PRICE TARGET AS IT SEES HIGHER OFFER FOR CO
*GENUITY STARTS QUEBECOR INC (QBRb.TO) WITH BUY RATING; PRICE TARGET OF C$22 ($1=$1.22 Canadian) (Reporting by Scott Anderson, Editing by Chizu Nomiyama)