Canadian stocks are poised for a marginally higher open Friday on bargain hunting as stocks were lingering near their 7-month low However, gains may be capped amid concerns over the euro zone, following downgrades by some rating agencies.
Fitch Ratings downgraded the Greek credit rating by one notch to CCC from B- on concerns that the nation will exit from the euro zone. Meanwhile, Moody's Investor Service downgraded 16 of Spain's banks.
Back home, the Canadian dollar was recovering from recent losses after inflation in April rose at a faster phase than widely expected.
U.S. stock futures were pointing to a marginally higher open.
On Thursday, the S&P/TSX Composite Index snapped its four session losing streak to edge up 4.60 points or 0.04 percent to 11,330.68.
The price of crude oil was little changed Friday morning as traders await more clarity from the developments in the euro zone. Crude for June delivery edged down $0.16 to $92.40 a barrel.
The price of gold was extending gains Friday morning as a steady euro prompted some buying of the precious metal. Gold for June gained $12.10 to $1,587.00 an ounce.
In corporate news from Canada, Industrial valves maker Velan Inc. (VLN.TO) reported a lower fourth quarter profits of $4.40 million or $0.27 per share, compared to $7.12 million or $0.31 per share last year.
In economic news, Statistics Canada said consumer prices rose 2.0 percent in the 12 months to April, led by increases in transportation costs. Economists were expecting the index to come in at 1.90 percent. Energy prices increased 1.1 percent in the 12 months to April, following a 5.1 percent rise in March. The slower increase in April was largely attributable to smaller price gains for gasoline and electricity, as well as price declines for natural gas (-13.9 percent).
Meanwhile, the Bank of Canada's core index rose 2.1 percent in the 12 months to April, led by price increases for the purchase of passenger vehicles. This increase followed a 1.9 percent gain in the core index in March.
From the euro zone, Germany's producer price inflation slowed to the lowest level in twenty-two months in April, data released by the Federal Statistical Office showed. The output price inflation eased to 2.4 percent in April from 3.3 percent in March, while economists expected inflation to slow to 2.5 percent. The growth rate for April was the smallest since June 2010, when output prices increased 1.7 percent.
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