TSX heads for higher open, poor Japanese data raises hopes for central bank aid

TORONTO - The Toronto stock market appeared set for a positive start to trading Monday as another dose of subpar economic data from Asia reinforced hopes for central bank intervention to keep a flagging global economic recovery going.

The Canadian dollar was unchanged at 100.91 cents US.

U.S. futures were little changed as the Dow Jones industrial futures dipped four points to 13,168, the Nasdaq futures edged up one point to 2,722 and the S&P 500 futures added 0.4 of a point to 1,402.8.

Traders digested data showing a steep falloff in Japanese economic growth during the second quarter.

Japan’s economy grew by only 0.3 per cent in the second quarter from the previous three-month period, half the rate that was expected. It was also sharply lower from the first quarter’s upwardly revised rate of 1.3 per cent.

The stall reflected the fallout from Europe’s debt crisis and the sharp rise in the value of the yen, which makes it more difficult for the country’s export sector to compete in the international marketplace.

Markets in Toronto and New York advanced last week despite news Friday that export growth in China during July plunged to just one per cent from the previous month’s 11.3 per cent, which was well below forecasts of about five per cent.

But the dismal report helped fuel speculation that China’s central bank was preparing to act with some type of measure to spur business activity.

Investors are also hoping to see further stimulus action from the U.S. Federal Reserve. They are also counting on the European Central Bank to do whatever is necessary to keep the continent's monetary union intact.

Oil prices advanced as investors awaited the release of U.S. retail sales figures for July.

Benchmark crude for September delivery was up 80 cents at $93.67 a barrel on the New York Mercantile Exchange. Analysts say attention this week will focus partly on U.S. retail sales as an indicator of whether demand for crude could increase or slacken. That report comes out Tuesday before the market open.

Crude prices retreated Friday after the International Energy Agency lowered its forecast for global crude demand for the year to 89.6 million barrels a day from 89.9 million due to a "combination of persistently high prices and a weak economic backdrop."

Other commodities were mixed with September copper on the Nymex off another three cents to US$3.37 a pound. Copper slipped three cents Friday in the wake of the disappointing Chinese data. China is the biggest consumer of the metal.

December gold gained $1.30 to US$1,624.10 an ounce.

Other highlights of the economic calendar this week are likely to be Tuesday’s first estimate of second-quarter economic growth in the 17-country eurozone.

In mainland China, the Shanghai Composite Index fell 1.5 per cent while the Shenzhen Composite Index slid 2.1 per cent.

European bourses were mixed as London's FTSE 100 index dipped 0.05 per cent, Frankfurt's DAX was up 0.27 per cent and the Paris CAC 40 added 0.17 per cent.

Earlier in Asia, most stock markets closed lower, with Japan’s Nikkei 225 down 0.1 per cent, Hong Kong’s Hang Seng fell 0.3 per cent and South Korea’s Kospi lost 0.7 per cent.

On the corporate front, engineering company SNC-Lavalin (TSX: SNC) has appointed Robert Card, a former senior executive at CH2M Hill Companies Ltd., as SNC's new chief executive. The appointment followed the resignation of Pierre Duhaime, who stepped down amid controversy over millions in mysterious payments outside Canada.

SNC-Lavalin has been feeling the fallout from investigations into $56 million worth of payments that were directed through its Tunisian office to unknown sales agents during the Ghadafi regime.

Google Inc. (Nasdaq:GOOG) plans to cut about 4,000 positions at its Motorola Mobility subsidiary, about one-fifth of the cellphone maker’s total workforce. Google acquired Motorola Mobility Holdings earlier this year for US$12.5 billion as part of its telecom strategy.

News from © The Canadian Press, 2012