Source: The Canadian Press

The Toronto stock market appeared headed for a negative start Tuesday as weaker-than-expected domestic growth and European debt concerns weigh on investor sentiment.

Statistics Canada found real gross domestic product rose 0.3% in the third quarter, much lower than the 1.4% growth economists had been expecting.

Bank of Montreal deputy chief economist Douglas Porter said that means the Bank of Canada will be in no rush to raise interest rates when it makes its announcement next week.

“In a nutshell, this result is a clear disappointment, especially after the surprisingly perky growth rates seen earlier this year,” he said in note.

“In hindsight, it looks like the economy borrowed all the growth from the second half of the year and put it in the first few months of 2010. Bottom line for the Bank of Canada — there’s zero rush to raise rates again,” he added.

The Canadian dollar moved 0.85 of a cent lower at 97.32 cents US.

Oil prices moved lower on reports that China could raise interest rates by as much as two percentage points, slowing growth in the rapidly developing country, which would cool demand for commodities.

The January crude contract was off 79 cents to US$84.94 a barrel.

Meanwhile, the price of gold rose $16.60 to $1,382.60 per ounce and copper contracts were unchanged at $3.76 per pound.

Soaring prices in China, the world’s No. 2 economy, are so far limited mostly to food, but analysts say price pressure could spread to other areas unless Beijing hikes interest rates and further tightens credit.

Wall Street was poised for a fairly flat open as investors awaited news on consumer confidence and home prices.

Dow futures were down 90 points at 10,949 while the broader Standard & Poor’s 500 futures fell 11.1 points to 1,175.40. The Nasdaq futures were down 22.5 points at 2,123.

The main focus in the markets once again was on Europe’s debt crisis and in particular how the bond markets are viewing the likelihood of further bailouts, following the weekend’s euro67.5 billion (US$89 billion) rescue package for Ireland.

On the TSX, it is the start of bank earnings seasons with the National Bank of Canada (TSX:NA) kicks off fourth quarter earnings season for the big six Canadian banks after markets close.

Shares in National Bank gained 15 cents to close at $68.73 Monday after being bolstered last week by expectations it may be the first big bank to raise its dividend since the recession.

GM Canada has announced it is adding 700 employees to support a second shift on its flex line at the Oshawa, Ont., assembly plant.

Meanwhile, a report from credit agency TransUnion that found the amount Canadians owe continues to increase but that the rate at which consumers are piling on debt is beginning to slow down.

The other theme in the markets at the moment is the seeming pickup in the pace of the economic recovery in the U.S. following encouraging Black Friday retail sales figures. Black Friday is the day after Thanksgiving when the Christmas shopping season effectively begins and most retailers start posting profit for the first time in the year.

Given the fairly buoyant anecdotal evidence, traders are keen to see if the monthly consumer confidence survey from the Conference Board surprises to the upside. The consensus in the markets is that the main index rose to 53 in November from October’s 50.2.

Trading across financial markets will likely be complicated by the month’s end, when investors square off positions, but most analysts think that December will continue to be dominated by Europe’s debt crisis.

European stocks were somewhat more settled following big declines Monday and Wall Street’s late rally. The FTSE 100 index was down 0.4%, while Germany’s DAX fell 0.4%. The CAC-40 in France was 1% lower.