TSX to head higher after central bank concerns send market tumbling

TORONTO – The Toronto stock market looked set for a higher open Wednesday after a sharp loss in the previous session caused by worries that central banks may be easing in their efforts to help the global economic recovery.

The Canadian dollar rose 0.2 of a cent to 98.35 cents US amid slight moves in commodity prices.

U.S. futures also advanced with the Dow industrial futures ahead 79 points to 15,217, the Nasdaq futures were up 14.25 points to 2.977.75 and the S&P 500 futures climbed 9.25 points to 1,636.25.

Crude prices were little changed as the July contract on the New York Mercantile Exchange slipped two cents to US$95.36 a barrel.

July copper was up two cents to US$3.21 per pound after worries about Chinese growth helped send the metal down 17 cents over the past four sessions. Uncertainty about China’s recovery has weighed on markets following weekend data showing exports, retail sales and other indicators weaker than expected.

And August bullion on the Nymex dipped a dime to US$1,376.90 an ounce.

The TSX tumbled 159 points Tuesday after Japan’s central bank failed to deliver expected measures to ease bond market volatility. Instead, the bank only upgraded its economic outlook.

There has also been concern about whether the U.S. Federal Reserve will ease its monetary stimulus. The Fed has been buying bonds to push down market interest rates, which has helped fuel a strong rally on U.S. markets that has gone up practically non-stop since late last year.

However, that rally has bypassed the TSX, which has been depressed by a mining sector weighed down by falling commodity prices amid a weak global economic recovery. Gold miners have also been a major weight as lower inflation concerns have depressed gold stocks and bullion prices. Energy stocks have suffered because of demand concerns and worries about the future of major pipeline projects such as Keystone XL which would move greater amounts of oilsands crude to American markets. And financials have weakened amid a slowing Canadian economy in general and a housing sector past its peak.

The TSX is down around 200 points year to date and finished lower in seven of the past eight sessions.

In corporate news, Hudson’s Bay Co. (TSX:HBC) lost $80.7 million in the latest quarter including discontinued operations, down from $129.7 million in the first quarter of 2012. Revenue rose by 4.2 per cent to $884 million. Hudson’s Bay stores in Canada had a 7.6 per cent same-store sales growth, offset by a 1.4 per cent decline at Lord & Taylor stores in the United States.

European bourses advanced as London’s FTSE 100 index gained 0.36 per cent, Frankfurt’s DAX added 0.13 per cent while the Paris CAC 40 was up 0.55 per cent.

Earlier in Asia, Tokyo’s Nikkei 225 shed 0.2 per cent, after spiking up nearly five per cent Monday after the prime minister promised new tax cuts. Markets in China, Hong Kong and Taiwan were closed for a holiday.

Seoul’s Kospi shed 0.6 per cent while Sydney’s ASX S&P 200 fell 0.7 per cent.