Toronto stock market could pull back as attention turns to Chinese economic data

TORONTO – Attention has shifted to a slate of upcoming Chinese economic data, putting investors in a cautious mood ahead of the open at the Toronto stock market.

The Canadian dollar rose back above parity, to 100.28 cents US, up 0.03 of a cent.

On Wall Street, the Dow Jones industrial futures fell 27 points to 13,092 and the broader S&P futures gave back 3.2 points at 1,393.80. Nasdaq futures were down 1.5 points at 2,708.50.

Investors could spend much of the day waiting for China to release inflation, factory output and retail sales data on Thursday. Analysts expect inflation to fall further, which would give authorities in Beijing room to shore up slowing growth by easing credit without fear of igniting a spike in consumer prices.

The pause from traders comes after a runup in stocks over the past couple of weeks, motivated in part by comments from the U.S. and European central banks. Crude oil prices have also started to climb back higher.

In commodities, the September crude contract on the New York Mercantile Exchange slipped 50 cents to US$93.17 a barrel.

September copper moved up nearly five cents to US$3.3439 a pound while December gold fell $3.90 cents to US$1,608.90 an ounce.

In Canadian earnings, Air Canada Inc. (TSX:AC.B) reported a $96-million net loss in the three-month period, more than double the $46 million loss a year earlier. The loss was deeper than analysts had expected. Revenue was flat, rising a slight $71 million to $2.99 billion.

BCE Inc. (TSX:BCE) is boosting both its dividend and 2012 earnings forecast. The telecom company says the dividend will rise to $2.27 per share annually, or 56.75 cents per share quarterly, beginning with the October payout. Adjusted earnings have been increased by two cents per share, to a range of between $3.15 and $3.20 per share.

The Montreal-based company said its profit rose to $773 million, or $1 per share, compared to $590 million or 76 cents a share a year ago.

In Europe, Germany’s DAX lost 0.6 per cent to 6,923 while France’s CAC-40 was 0.6 per cent lower at 3,433. Britain’s FTSE 100 fell 0.5 per cent to 5,812 after the Bank of England cut its growth and inflation forecasts. That has confirmed many economists’ expectations that the Bank of England will provide more monetary stimulus later this year.

Many of Europe’s indexes have hit multi-month highs on hopes the European Central Bank will soon unveil a new anti-crisis strategy. Those hopes have helped ease the bond market pressure on Italy and Spain. The latter has seen its benchmark 10-year bond yield settle below the seven per cent threshold considered unsustainable in the long run.

Earlier in Asia, most markets ended higher. Japan’s Nikkei 225 index rose 0.9 per cent to 8,881.16. South Korea’s Kospi added 0.9 per cent to 1,903.23 as sentiment improved a day ahead of a Bank of Korea meeting where policy makers are expected to lower interest rates to stimulate the economy. And China’s main index in Shanghai rose 0.2 per cent at 2,160.99.

But Hong Kong’s Hang Seng index fell marginally to 20,065.52 as investors became cautious ahead of the release of the key economic data in China.