Toronto market set for a muted open as Sherritt sells coal business for $945M - InfoNews

Current Conditions

Mostly Cloudy
1.5°C

Toronto market set for a muted open as Sherritt sells coal business for $945M

The TMX Group logo, home of the TSX, is shown in Toronto on June 28, 2013. THE CANADIAN PRESS/Aaron Vincent Elkaim
December 24, 2013 - 5:35 AM

TORONTO - The Toronto stock market was headed for a muted open Tuesday amid news that one of Canada's largest coal producers is getting out of the coal business.

Sherritt International Corp. (TSX:S) says it's selling its entire coal business to two separate buyers for a total of $946 million. Colorado-based Westmoreland Coal Co. will buy Sherritt's operating mines in Alberta and Saskatchewan for $465 million. While Altius Minerals of St. John's, N.L., (TSX:ALS) will buy Sherritt's entire coal royalty portfolio and coal development projects for $481 million. Sherritt will continue to run its other resource businesses in several countries.

The Canadian dollar was unchanged at 94.24 cents US.

Traders expect it to be a quiet day in Toronto and the U.S., with the Toronto exchange closing at 1 p.m. ET for Christmas Eve. The TSX will remain closed until Friday while markets in New York re-open on Dec. 26, which is a holiday in Canada.

On Wall Street, indexes were poised for a mixed open after the Dow Jones and the broader measure, the S&P 500, both hit record highs at the close on Monday.

The Dow Jones industrial futures was ahead three points to 16,241, the Nasdaq futures fell 1.30 points to 3,563.50 and the S&P 500 futures dipped 0.6 of a point to 1,822.20.

Commodities were positive as the February crude jumped 20 cents to US$99.11 a barrel. Gold prices gained $2.20 to US$1,199.20 an ounce, while March copper saw an uptick of two cents to $3.33 a pound.

Meanwhile, global stocks gained to gain traction as concerns over a cash crunch in China lessened and signs that the U.S. is continuing its economic recovery at a better-than-expected pace.

The advance has also come despite the U.S. Federal Reserve's decision to start reducing its monetary stimulus by $10 billion to $75 billion from January. Many had feared the decision to rein in its policy of quantitative easing, or QE, would be negative for stocks as the stimulus has shored up markets over the past few years.

"Earlier fears that the Fed calling time on QE would knock the potential for a classic Santa rally certainly don't seem to be living up to expectations," analysts at Monex Capital Markets said.

European markets have risen for five sessions in a row. By mid-session Tuesday, Britain's FTSE 100 index was up 0.3 per cent to 6,700, while France's CAC 40 rose 0.3 per cent to 4,225. The German stock market, which hit a record high Monday, was closed.

Earlier, Asian stocks advanced Tuesday after the People's Bank of China injected 29 billion yuan ($4.8 billion) into Chinese banks. Analysts believe the banks have been hoarding cash ahead of year-end to meet higher regulatory requirements.

Several spikes in bank-to-bank lending rates caused concern among investors that a cash shortage could force banks to restrain commercial lending and pressure the world's second-largest economy.

The rate banks charge each other for a one-week loan had surged as high as 9.8 per cent on Monday, but they dropped to 6.2 per cent Tuesday.

Tokyo's Nikkei 225 index inched up 0.1 per cent to 15,889.33, after briefly surpassing the 16,000 level for the first time in six years in the morning session. China's Shanghai Composite added 0.2 per cent to 2,092.91. Hong Kong's Hang Seng index gained 1.1 per cent to 23,179.55.

News from © The Canadian Press, 2013
The Canadian Press

  • Popular penticton News
  • Comments
View Site in: Desktop | Mobile