Source: The Canadian Press
The Toronto stock market was set for a higher open Wednesday as commodity prices were buoyed by a report that showed stronger Chinese manufacturing numbers and hopes for more positive economic reports in the United States.
The Canadian dollar added 0.72 cents to 98.13 cents US as other global currencies also made strides against the U.S. dollar.
The January crude contract was up $1.39 at US$85.50 a barrel on the New York Mercantile Exchange.
The December gold contract gained $7.50 to US$1393.60 an ounce on the Nymex while the December copper contract moved up six cents to US$3.88 per pound.
Sentiment in global markets has been buoyant since figures showed China’s manufacturing boom accelerated in November, sustaining hopes that the world’s second largest economy is still continuing to grow strongly.
Robust Chinese growth means strong demand for commodities like oil, and reports from the rapidly developing country are of particular interest to investors on the resource stock-heavy TSX.
The state-affiliated China Federation of Logistics and Purchasing said its purchasing managers index — a gauge of business activity — rose to 55.2 last month from 54.7 in October. A competing index, the HSBC China Manufacturing PMI also rose solidly.
“Chinese economic data has come in ahead of expectations so this may help cheer investors a little, underlining the fact there’s still strength in this booming economy,” said Ben Potter, research analyst at IG Markets.
The figures proved to be a welcome relief to investors, who have for days only been interested in one thing — whether Europe’s debt crisis, which has already seen Greece and Ireland bailed out, will spread to other euro countries, notably Portugal, or more dangerously Spain. As a result, stocks around the world have been on the retreat, while the euro has slid to its lowest level since mid-September.
U.S. stocks were also poised for a solid open Wednesday awaiting several new reports including November auto sales, the ISM manufacturing index and a third-quarter productivity report. The Federal Reserve will also put out its report on regional economic activity.
The Dow Jones futures were up 127 points at 11,123 and Nasdaq futures added 23 points to 2,140. The S&P 500 futures were 15 points higher to 1,194.60.
Hopes are high that the figures to be released Wednesday will continue a trend of positive economic data coming out of the U.S., including improved consumer confidence levels.
On the TSX, investors will keep one eye focused on the financial sector after National Bank (TSX:NA) became the first big Canadian bank to boost its dividend since 2007 on Tuesday after it beat expectations and reported its fourth-quarter profits grew 19% from a year earlier.
The country’s sixth-largest bank raised its quarterly dividend by four cents to 66 cents per share.
The other Canadian banks will report earnings later this week.
Elsewhere, a report suggests Rogers Communications (TSX:RCI.A) is in talks to buy the Toronto Maple Leafs in a deal worth more than $1 billion.
In Europe, the FTSE 100 index gained 1.6%, while Germany’s DAX was up 2%, and France’s CAC-40 was 0.4% higher.
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