The Toronto stock market appeared headed for a lower open Thursday as commodity prices dropped amid reports from China and Europe showing a slowdown in manufacturing.
The Canadian dollar added 0.05 of a cent to 98.17 cents US.
Wall street markets were set for a slightly better open, with Dow Jones futures up nine points to 12,772, the S&P futures ahead 0.5 of a point to 1,351.2 and Nasdaq futures up 1.25 points to 2,618.5.
Appetite for financial assets such as stocks was also dented by the results of a monthly HSBC survey, which showed that manufacturing in China, the world’s number two economy, has continued to contract. China’s growth has been a pillar of the global economy in recent years, so its slowdown has been of particular concern to investors.
In the 17-country Eurozone, the equivalent manufacturing survey, called the purchasing managers’ index, fell to 44.8 points in June from 45.1 the previous month. A number below 50 indicates contraction. A related survey on the services sector showed declining activity and suggests a drop in GDP in the second quarter.
August gold prices dropped sharply, by US$18.80 to US$1,597 an ounce, while July copper prices lost four cents to US$3.35 a pound.
Oil prices hovered around eight-month lows, losing 55 cents to US$80.90 a barrel after the U.S. Federal Reserve stopped short of implementing vigorous stimulus measures to boost waning economic growth and U.S. crude stockpiles rose unexpectedly.
The Fed on Wednesday extended an interest rate reduction program known as Operation Twist, pledging to sell $267 billion of short-term Treasury bonds and buy longer-term Treasurys through December. However, traders had been hoping for a more aggressive stimulus package known as quantitative easing.
Analysts says the program’s extension might not provide much benefit. Businesses and consumers who aren’t borrowing now aren’t that likely to change their minds just because rates drop a little more.
Europe’s finance ministers will meet later Thursday to try to find common ground on whether to soften Greece’s austerity terms, possibly clear a bank bailout request from Spain and discuss new ways to boost confidence in the Eurozone.
The ministers’ meeting in Luxembourg will try to make progress on wide-ranging solutions to the debt crisis that leaders hope to see adopted by an European Union summit on June 28. The leaders of Germany, France, Italy and Spain will meet in Rome on Friday.
By late morning in Europe, Britain’s FTSE 100 was off 0.5% at 5,596.68 and Germany’s DAX had dropped 0.4% to 6,368.42. France’s CAC 40 shed 0.3% to 3,116.07.