A tote board TSX numbers in Toronto, on Dec.31, 2012. THE CANADIAN PRESS/Frank Gunn

TORONTO - The Toronto stock market looked set to exit January trading on a negative note amid worries about European deflation and emerging markets.

There was also a major acquisition in the energy sector. Uranium miner Cameco (TSX:CCO) is selling its share of the Bruce Power nuclear partnership in southwestern Ontario to Borealis Infrastructure for $450 million.

The Canadian dollar was down 0.2 of a cent to 89.36 cents US ahead of the release of the latest reading on economic growth. Statistics Canada was expected to report that gross domestic product grew by 0.2 per cent during November, down from a 0.3 per cent rise in October.

U.S. futures signalled a sharply lower start to the session with the Dow Jones industrial futures down 108 points to 15,625, the Nasdaq futures fell 14.5 points to 3,487.5 and the S&P 500 futures lost 12.4 points to 1,768.8.

Eurostat, the EU’s statistics office, reported that inflation in the eurozone fell to 0.7 per cent in the year to January from 0.8 per cent the previous month.

The data raised worries that the eurozone could slip into a situation where prices are actually falling. Such a development can hurt an economy as consumers delay purchases and businesses postpone investment.

The deflation concerns added to emerging market worries that have buffetted markets this past week.

Countries including Turkey, South Africa, India and Russia have seen their currencies slide sharply over the past week. Traders worry that growth will slow and money will flow out of their economies as the U.S. Federal Reserve tightens its monetary policy.

The TSX looked set to rack up a small gain for the month but the Dow has already plunged 4.4 per cent.

Canadian National Railway (TSX:CNR) will be in focus at the open after the railroad posted quarterly earnings of $635 million or 76 cents, missing estimates by a penny as results were impacted by tough winter conditions. CN also upped its quarterly dividend by 16 per cent to 25 cents.

At the same time, RBC Capital Markets upped the stock to outperform and raised its price target from $64 to $66 as it judged that 2014 is shaping up to be yet another record year for the railroad.

In the U.S., Amazon stock fell more than seven per cent in pre-market trading as quarterly earnings came in at $239 million, or 51 cents per share, which included the key holiday shopping period. Revenue grew 20 per cent to $25.59 billion. But analysts were expecting earnings of 74 cents per share on revenue of $26.05 billion.

On the commodity markets, March crude in New York fell $1 to Us$97.23.

March copper lost two cents to Us$3.21 a pound while April gold gained $5.90 to US$1,248.10 an ounce.

European bourses were sharply lower following the inflation report with London's FTSE 100 index down 1.17 per cent, Frankfurt's DAX declined 1.5 per cent and the Paris CAC 40 fell 1.4 per cent.

Earlier, in Asia, many markets were closed for the Lunar New Year holidays.

Japan’s Nikkei 225 closed down 0.6 per cent, Thailand’s SET was up 0.4 per cent while Australia’s S&P/ASX 200 added less than 0.1 per cent.

News from © The Canadian Press, 2014