TORONTO – The Toronto stock market was headed for a higher open Monday, aided by positive news for Asia’s two largest economies.
The Canadian dollar was up 0.28 of a cent to 96.35 cents US.
Overnight, Japanese shares rallied thanks to Tokyo’s Olympic bid victory, which helped lift sentiment, while Chinese stocks surged following positive economic data that added to a picture of gradual recovery in the world’s second largest economy.
The Nikkei 225 jumped nearly 2.5 per cent to close at 14,205.23, and the yen fell after Tokyo was chosen to host the 2020 Summer Olympics and a revised estimate showed the economy grew faster than previously reported in the second quarter. The Olympics are expected to provide a welcome boost, much of it in the construction sector, where the government is already spending heavily as part of its stimulus program.
Chinese stocks rose after data showed that the country’s exports accelerated while inflation edged lower last month, raising hopes that China is on the path to recovery from a slowdown. It’s the latest sign that China is stabilizing after growth fell to a two-decade low of 7.5 per cent in the second quarter. Shanghai’s benchmark index advanced 3.4 per cent to 2,212.52 while Hong Kong’s Hang Seng added 0.6 per cent to 22,750.65.
On Wall Street, U.S. futures were higher as the Dow Jones industrial futures rose 28 points to 14,937, the Nasdaq futures were up 14.25 points to 3,143.75 and the S&P 500 futures were ahead 3.80 points to 1,657.30.
In corporate news, uranium producer Cameco Corp. (TSX:CCO) says it will miss its 2013 production target for its Cigar Lake mining project in Saskatchewan due to delays in starting up ore production and mill processing.
It’s the latest setback for Cigar Lake, which is operated by Cameco on behalf of several partner companies. The major new mine has been delayed several times in past years due to flooding and other technical issues. The Saskatoon-based company owns about half of Cigar Lake and had previously forecast the mine would produce 300,000 pounds of U3O8 this year but now expects production won’t begin until 2014.
Cameco says construction of the mine is 97 per cent complete but it has identified additional work that will be required in the underground ore handling facilities.
Traders will be anticipating a clearer message this week on the Syria situation. U.S. President Barack Obama is set to take his case Tuesday to Americans for punishing the Assad regime for an alleged sarin gas attack on civilians Aug. 21. A congressional vote on military action could come sometime this week as lawmakers return from their summer break.
Also, the markets will also take a cue from whether the Federal Reserve will give away on any clues on their plans to roll back quantitative easing. The prospect of the Fed tapering its $85-billion a month bond buyback program has been speculation for the past few months. A move will likely shift markets as the stimulus has kept rates low and channelled lots of money into equity markets around the globe.
There is still a good deal of doubt about Fed intentions ahead of the central bank’s meeting Sept.17-18, with doubts fuelled by last week’s U.S. August jobs data that narrowly missed expectations.
It was quieter in Europe, as the FTSE 100 index of leading British companies fell 0.1 per cent to 6,538.14 while Germany’s DAX advanced 0.1 per cent at 8,286.40. France’s CAC 40 dipped 0.2 per cent to 4,040.21.
On the commodities front, December bullion dropped $3.70 to US$1,382.80 an ounce.
The October crude contract on the New York Mercantile Exchange fell 34 cents to US$110.19 a barrel. Copper was up three cents to $3.29.