TORONTO – The Toronto stock market appears headed for a slightly higher open although investors may be wary of the unclear political situation in Italy, which has Europe’s third-largest economy and one of the region’s highest national debts.

The TSX could find some support from the financial sector after Bank of Montreal (TSX:BMO) delivered surprisingly strong revenue and a first-quarter profit that remained above $1 billion, beating analyst estimates. Analysts had estimated about $958 million in adjusted profit, the equivalent of $1.48 per share. Instead, BMO beat that by four cents per share with $1.041 billion of adjusted net income, up $69 million or seven per cent from a year earlier.

Royal Bank (TSX:RY), CIBC (TSX:CM) and TD Bank (TSX:TD) post earnings on Thursday and Scotiabank (TSX:BNS) reports next week.

Commodities were mixed Tuesday. Gold prices were higher but oil and metals fell after the initial results of the Italian election showed voters were fed up with the austerity measures enacted by the previous technocratic government led by Mario Monti, who was brought in to deal with the country’s huge debt levels.

But voter anger against the Monti government was channelled through several outlets. The centre-left coalition led by Pier Luigi Bersani appears to have won a narrow victory in the lower house of parliament while the Senate looks split with no party in control.

“We expect risky assets to remain under pressure until the picture in Italy becomes clearer,” said a commentary from Barclays Research.

“Italian political instability is now likely to prevail in the near term and slow the implementation of much needed structural reforms, unless a grand coalition among the centre-left, centre-right and centre parties is formed. Italy cannot risk being trapped in a political impasse for too long.”

The Canadian dollar advanced after a six-session losing streak that brought the loonie down to its lowest levels since late last June. The currency was up 0.19 of a cent to 97.5 cents US.

U.S. futures were higher amid a strong earnings report from Home Depot.

The Dow Jones industrial futures up 35 points to 13,823, the Nasdaq futures gained 5.25 points to 2,707.5 and the S&P 500 futures climbed 4.75 points to 1,492.

The TSX fell 51 points Monday while the Italian political uncertainty sent the Dow industrials tumbling 216 points.

In Europe Italy’s FTSE MIB index was the worst-performing index, with some of the banking stocks suspended for a brief period after precipitous falls at the open. The index was trading 4.25 per cent lower, having earlier been nearly five per cent down.

The interest rate on the country’s benchmark 10-year bond, which is an important gauge of investor sentiment, ratcheted up 0.30 percentage point to 4.74 per cent

Silvio Berlusconi, the former Italian premier whose centre-right coalition defied expectations and has seemingly prevented the centre-left from winning, insisted a government can be formed and called on Italians to ignore the “crazy markets.”

Traders have good reason to be nervous about how Italy deals with its finances. Though its budget deficit is fairly small compared with other euro countries at three per cent of its annual gross domestic product, its overall debt stands at a huge €2 trillion.

Last July, concerns over the country’s ability to pay down its debt and the stability of the wider eurozone sent the interest rate on its 10-year bonds back up to 6.36 per cent. This prompted the European Central Bank chief Mario Draghi to offer to buy up unlimited quantities of short-term debt in countries struggling with high borrowing costs.

Elsewhere in Europe, London’s FTSE 100 fell 1.33 per cent, Frankfurt’s DAX lost 1.72 per cent and the Paris CAC 40 dropped 2.04 per cent.

On the commodity markets, the April crude contract on the New York Mercantile Exchange lost 64 cents to US$92.47 a barrel.

March copper gave back two cents to US$3.53 a pound but traders looking for safety pushed the April bullion contract $7.80 higher to US$1,594.40 an ounce.

In other earnings news, Home Depot’s fiscal fourth-quarter net income surged 32 per cent to $1.02 billion, or 68 cents per share. That compares with $774 million, or 50 cents per share, a year ago. Analysts polled by FactSet expected 64 cents per share.

Revenue climbed 14 per cent to $18.25 billion from $16.01 billion, beating Wall Street’s estimate of $17.72 billion.

Earlier in Asia, standout losses were recorded by Japan’s Nikkei, which slid 2.3 per cent as the yen appreciated to the potential detriment of the country’s exporters.

Elsewhere in Asia, Hong Kong’s Hang Seng dropped 1.3 per cent while South Korea’s Kospi fell 0.5 per cent.