Canada's bank headquarters are shrouded in fog as a sign displays TSX numbers on December 30, 2011. THE CANADIAN PRESS/Frank Gunn
July 03, 2012 - 8:28 AM
TORONTO - The Toronto stock market looked set for a positive start to July trading as commodity prices advanced amid hopes that central banks will take action to keep the fragile global economic recovery on track.
The Canadian dollar rose 0.27 of a cent to 98.49 cents US.
New York futures were higher ahead of a shortened session. Markets in the U.S. will be open for a half-day Tuesday and closed Wednesday for the Independence Day holiday.
The Dow Jones industrial futures added three points to 12,779, the Nasdaq futures gained four points to 2,618.2 and the S&P 500 futures were up 1.2 points to 1,358.8.
Some analysts expect the European Central Bank to cut lending rates and the Bank of England to boost money in circulation at meetings later this week. There are also hopes that Japan and China will announce new stimulus measures.
Rising expectations for central bank help come at a time of heightened concerns that the U.S. economy could be stalling after the Institute for Supply Management said Monday that U.S. manufacturing shrank in June for the first time in almost three years.
"The previously pace-setting factory sector has obviously stumbled, bumped by global economic headwinds (the euro crisis being the epicentre) and more cautious domestic spending," said BMO Capital Markets senior economist Michael Gregory.
The Toronto stock market finished last week with a strong advance after Europe's leaders appeared to have finally come up with plans that show they are serious about restoring confidence in the eurozone.
Among other things, the plan allows European bailout funds to pump money directly into troubled European banks, rather than make loans to governments to bail out the banks. The move rescues the banks without putting strapped countries deeper in debt.
Rising optimism gave commodity prices a solid lift, with the August crude contract on the New York Mercantile Exchange ahead $2.08 to US$85.83 a barrel.
Copper futures jumped seven cents to US$3.53 a pound while gold bullion gained $16.50 to US$1,614.20 an ounce.
In Asia, Japan's Nikkei 225 index rose 0.7 per cent and South Korea's Kospi gained 0.9 per cent. Australia's S&P/ASX 200 fell 0.1 per cent while China's Shanghai Composite advanced 0.1 per cent.
Hong Kong's Hang Seng jumped 1.5 per cent.
European bourses were positive with London's FTSE 100 index ahead 0.29 per cent, Frankfurt's DAX advancing 0.79 per cent and the Paris CAC 40 up 0.31 per cent.
In corporate news, Research In Motion (TSX:RIM) chief executive Thorsten Heins says "there's nothing wrong with the company as it exists right now" and that he is confident it will get past the current challenges that have resulted in layoffs of about 5,000 people and faltering sales of its BlackBerry smartphones.
Heins made the comment in a CBC Radio interview, part of the company's efforts to convince customers and investors that it can survive the US$518-million loss announced last week.
Barclays Chief Executive Bob Diamond quit his job Tuesday, the latest scalp in a financial markets scandal that has also seen the bank's chairman announce his intention to resign.
Barclays' management has come under fire since the bank was fined $453 million last week by U.S. and British regulators for submitting false reports on interbank borrowing rates between 2005 and 2009. Much of that activity originated from traders in Barclays Capital, the investment banking division which Diamond headed at the time.
News from © The Canadian Press, 2012