Source: The Canadian Press

The Toronto stock market could be in for a lower open Wednesday amid a weak retail sales report from Statistics Canada along with lower oil and copper prices on commodity markets.

Statistics Canada reported that retail sales decreased by 2% in April following a gain of similar magnitude in March. Declines were led by a slide of almost 5% at motor vehicle and parts dealers during April.


Economists had expected smaller dip, with estimates ranging from 0.3% to as much as 0.5%, and the Canadian dollar was down 0.73 of a cent to 96.44 cents US following the report.

New York futures were higher as investors look ahead to an afternoon announcement from the U.S. Federal Reserve on interest rates and economic prospects. The Fed is expected to hold a key interest rate at a historic low of between zero and 0.25%.

The Dow Jones industrial futures rose 43 points to 10,276, the Nasdaq futures gained 8.5 points to 1,886.75 while the S&P 500 futures were ahead 4.5 points to 1,095.

The U.S. central bank has taken a position that rates will remain low indefinitely as it tries to drive a recovery. But the rate-setting committee has also indicated the economy is improving, so any further indications of growth would be a welcome sign for a market that has been choppy and volatile in recent weeks.

Crude oil declined despite a forecast from the International Energy Agency that world oil demand will grow faster than expected through 2015 due to stronger economic growth, particularly in developing countries such as China and India.

The IEA said world oil demand will grow by an average of 1.4% annually through 2015. That compares with last year’s forecast of average annual demand growth of 0.6% over the 2008-2014 period.

The August crude contract on the New York Mercantile Exchange stepped back 57 cents to US$77.28 a barrel.

The July copper contract on the Nymex slipped three cents to US$2.96 a pound while gold headed higher with the August contract in New York ahead $2.30 to US$1,243.10 an ounce.

Stock markets finished sharply lower on Tuesday in the wake of an unexpected drop in U.S. existing home sales which sparked worries over the pace of recovery in the world’s largest economy. Buying sentiment was also hurt by a downgrade of European banking giant BNP Paribas by ratings agency Fitch, with the TSX finishing the day down 138 points and the Dow industrials lost 149 points.

Sentiment in Europe was also hurt Wednesday by a report showing economic activity slowed in June. The eurozone’s Purchasing Managers’ Index, a survey of professionals’ views in various sectors, edged down for both manufacturing and services.

It “is another sign that the announced austerity measures may be starting to take a toll,” said Ben May, European economist at Capital Economics in London.

Spending cuts across Europe have raised worries about growth. Britain was the latest major nation to unveil some of the sharpest austerity measures in decades in an emergency budget on Tuesday.

London’s FTSE 100 index dipped 0.8%, Frankfurt’s DAX was off 0.14% while the Paris CAC 40 index was down 0.6%.

In Asia, Japan’s benchmark Nikkei 225 stock index dived 1.9%, South Korea’s Kospi shed 0.3% and Australia’s S&P/ASX 200 fell 1.6%.

Hong Kong’s Hang Seng gained 0.2% while the Shanghai Composite Index ended off 0.7%.

In corporate news, AGF Management Ltd. (TSX:AGF.B) reported that second quarter profits rose nearly 60% to $27.5 million from $17.2 million a year ago while revenues increased 7.2% to $153.8 million.

Pacific Rubiales Energy Corp. (TSX:PRE), a Toronto-headquartered company focused on natural gas and heavy crude oil in Colombia and northern Peru, has been awarded six new land blocks in Colombia. The six include three awarded to a joint venture between subsidiaries of the company and Talisman Energy Inc. (TSX:TSM).

Petrominerales Ltd. (TSX:PMG) has been awarded more two blocks in Colombia’s Llano Basin in return for commitments to spend $24.2 million over three years on exploration activities. The company, which is 66% owned by Petrobank Energy and Resources Ltd. (TSX:PBG), now has 17 exploration blocks in Colombia and five in Peru.

HudBay Minerals Inc. (TSX:HBM) said that additional gold and copper discoveries at the Lalor deposit near Snow Lake, Man., reinforce confidence in its flagship growth project, which will be moving into a new phase later this year. HudBay, which has identified Lalor as its major growth initiative, said drilling has found notable amounts of gold, silver, copper and zinc in areas beyond previously identified zones.