Source: The Canadian Press

The Toronto stock market appeared headed for a negative start to June trading Tuesday amid a report showing Chinese manufacturing slowed in May, and fresh concerns about the health of Europe’s economic recovery.

U.S. futures also pointed to a lower start to the session as traders return to work following the Memorial Day holiday. The Dow Jones industrial futures fell 113 points to 10,013, the Nasdaq futures were down 18.75 points to 1,833.25 while the S&P 500 futures pulled back 14.9 points to 1,073.6.

Meanwhile, a stronger U.S. currency helped push the Canadian dollar down 0.68 of a cent to 95.15 cents US ahead of the Bank of Canada’s announcement on interest rates, scheduled for 9 a.m. EDT. The central bank is expected to push its key interest rate up 0.25 of a point to 0.5%.

Investors took in earnings from the last of the big Canadian banks to report earnings for the last quarter. Scotiabank (TSX:BNS) turned in a record profit of nearly $1.1 billion or $1.02 a share, which beat beating analyst estimates of about 93 cents per share. Earnings were up sharply from $225 million a year ago. The bank’s provision for credit losses was reduced to $338 million, down $151 million from the same time last year.

Meanwhile, the greenback strengthened as the euro fell to a new four-year low of US$1.2112 before rising slightly to US$1.2162. The euro has been seen as an indication for confidence in whether countries like Greece, Spain and Portugal will be able to cut spending to contain mounting debt without stalling a recovery.

“Investors are not convinced that the crisis will end soon. With growing uncertainty over the euro zone’s crisis, investors are bracing for a further slump in the euro against the dollar,” Masatoshi Sato, market analyst at Mizuho Investors Securities Co. Ltd. in Tokyo.

Worries about Chinese growth were in focus after surveys showed that growth in the country’s manufacturing sector had slowed.

The state-affiliated China Federation of Logistics and Purchasing said its purchasing managers index, or PMI, fell to 53.9 in May from 55.7 in April and 55.1 in March due to lacklustre demand both at home and abroad.

Strong Chinese growth has helped lead the global economy out of recession and has been particularly beneficial to the resource heavy Toronto stock market because of heavy demand for oil and metals.

Concern over slipping growth and the stronger American currency pushed the July crude contract on the New York Mercantile Exchange down $1.87 to US$72.10 a barrel.

Mining companies could be under selling pressure as July copper in New York slipped six cents to US$3.05 a pound.

The August bullion contract on the Nymex ran up $10.30 to US$1,225.30 an ounce.

Earlier in Asia, Japan’s Nikkei 225 stock average fell 0.6%, and Australia’s S&P/ASX 200 dropped 0.4%.

Hong Kong’s Hang Seng retreated 1.4%. The signs of slowing in the manufacturing sector helped drag China shares lower, with the benchmark Shanghai Composite Index falling 0.9%.

London’s FTSE 100 index fell 2.19% with shares in BP PLC plunging 13% to 429.2 pence (US$6.20) on the London Stock Exchange. Because of a bank holiday, Tuesday was the first day of London trading after the oil company’s failed attempt over the weekend to block the oil leak in the Gulf of Mexico.

BP said that costs for the spill have reached US$990 million.

Frankfurt’s DAX lost 1.76% while the Paris CAC 40 was down 2.14%.

In other corporate news, shares of the newly renamed Equal Energy Ltd. (TSX:EQU) begin trading on the Toronto and New York stock exchanges, starting Tuesday. The Calgary company was formerly known as Enterra Energy Trust, until it was converted to a corporation. As Equal, the business will continue to develop Hunton natural gas play in Oklahoma as well as its drilling projects in B.C., Alberta and Saskatchewan.