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TSX Poised For Lower Open On Weak Global Cues - Canadian Commentary

TSX Poised For Lower Open On Weak Global Cues - Canadian Commentary
4/23/2012 9:02 AM ET

Canadian stocks are poised for a lower open Monday amid falling commodities and on weak cues from the global equity markets. While most Asian markets ended in the negative territory overnight, European shares were lingering deep in the red after reports showed manufacturing contracted in the euro zone and China.

U.S. Stock futures were pointing to a lower open.

On Friday, the S&P/TSX Composite Index edged down 6.41 points or 0.05% to 12,147.28.

The price of crude oil was lingering below $103 Monday morning amid concern over the euro zone debt crisis. Crude for June was down $1.06 to $102.82 a barrel.

The price of gold was lingering near its two-week low Monday morning amid a generally steady US dollar. Gold for June shed $12.40 to $1,630.40 an ounce.

In corporate news from Canada, global drilling services company Foraco International SA (FAR.TO) announced the acquisition of 51% of Brazilian mineral drilling services company WFS Sondagem LTDA for approximately $43 million through a combination of cash and Foraco shares.

In economic news, Statistics Canada said wholesale sales rose 1.6 percent in February to C$48.5 billion, followed a 1.1 percent decline in January. Economists predicted wholesale sales would be down 0.17 percent, but a 2.2 percent rise in volumes helped drive a monthly increase.

Earlier today, HSBC said that its preliminary Purchasing Managers Index rose to 49.1 in April from 48.3 in March, indicating a recovery in Chinese growth in the first quarter. However, it still showed a second month of contraction because a reading below 50 indicates a drop in industrial production.

Elsewhere, the euro zone private sector activity declined further to a 5-month low in April, flash estimate published by Markit Economics showed. The composite output index dropped unexpectedly to 47.4 in April from 49.1 in March. Economists were forecasting the reading to rise to 49.3. A reading below 50 suggests contraction in the private sector.

A separate data from Markit Economics revealed that German private sector growth eased in April with activity reaching levels close to stagnation. The composite output index, that measures performance of both manufacturing and services, fell to a five-month low of 50.9 in April from 51.6 in March. A reading above 50 indicates expansion of the sector, while a reading below 50 suggests contraction.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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