Toronto stock market heads for lower open amid weak Chinese manufacturing data - InfoNews

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Toronto stock market heads for lower open amid weak Chinese manufacturing data

February 03, 2014 - 5:46 AM

TORONTO - Worries about emerging markets were expected to weigh on the Toronto stock market again on Monday, as they did last week.

The Canadian dollar was up 0.52 of a cent to 90.31 cents US.

U.S. futures were slightly higher as data showing a slowdown in Chinese manufacturing added to concerns about countries such as Turkey, South Africa and India, all of which had to hike rates last week to support their currencies.

These countries and others have been hit by an outflow of investor funds as the U.S. Federal Reserve cuts back on its massive monthly bond purchases, a move that kept U.S. long-term rates low and resulted in a flow of cheap money into emerging markets.

But the primary worry is contagion from those countries.

"The recent turbulence in emerging market assets has sparked concerns around the impact of weakening emerging market growth on developed market growth," said a commentary from Barclays Research.

"If the current emerging market stress does not intensify further . . . then we think the implications for (economic) growth in developed markets should be manageable."

The Dow Jones industrial futures rose 21 points to 15,651, the Nasdaq futures gained 3.5 points to 3,517.5 while the S&P 500 futures added 1.75 points to 1,778.25.

China's official purchasing managers' index showed the manufacturing sector continuing to expand during January but at a slower pace, coming in at 51.5, down from 52.5 in December. Any reading above 50 signals expansion.

Traders also awaited the release of the latest snapshot of the American manufacturing sector coming out mid-morning. The Institute for Supply Management is expected to also show slower expansion with a reading of 56, down from 56.5 in December.

The major economic data for the week comes out Friday — December employment reports for the U.S. and Canada.

Economists expect U.S. job growth of around 193,000 after a disappointing read of only 74,000. But markets were inclined to blame much of that sub-par performance on adverse weather conditions.

Statistics Canada was expected to report the economy created about 15,000 jobs after 44,000 positions were erased in December.

Commodity prices were unaffected by the Chinese data as HSBC's manufacturing report from last week had already braced investors for another indication of a slowdown in the world's second-biggest economy.

March crude in New York dipped two cents to US$97.47.

March copper was unchanged after falling about 2.25 per cent last week and April gold gained $7.20 to US$1,247 an ounce.

In corporate news, Husky Energy (TSX:HSE) has given the green light to a $300-million equipment upgrade at its refinery in Lima, Ohio, so it can process heavy crude from Western Canada.

Canadian aerospace manufacturer Heroux-Devtek (TSX:HRX) has acquired the British landing-gear company APPH from BBA Aviation PLC for $128 million.

Markets were closed in Hong Kong, China, Taiwan and Malaysia for Lunar New Year holidays. Seoul’s Kospi dropped 1.1 per cent while Australia’s S&P/ASX 200 fell less than 0.1 per cent.

European bourses were mixed with London's FTSE 100 down 0.25 per cent, Frankfurt's DAX was off 0.03 per cent and the Paris CAC 40 was up 0.16 per cent.

News from © The Canadian Press, 2014
The Canadian Press

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