TSX set to rise after big drop

Fri Nov 21, 8:59 AM
TORONTO (Reuters) - The Toronto Stock Exchange's main index is poised to rise on Friday after a 9 percent tumble in the previous session on firmer oil and metals prices, and as stocks in Europe and Asia were higher.
Enlarge Photo
(Reuters)

TORONTO (Reuters) - The Toronto Stock Exchange's main index is poised to rise on Friday after a 9 percent tumble in the previous session on firmer oil and metals prices, and as stocks in Europe and Asia were higher.

The S&P/TSX composite index sank to its lowest level in five years on Thursday as an earnings warning from Toronto-Dominion Bank pounded the financials group and the price of crude slid below $50 a barrel. It was the biggest percent drop since October 1987.

Here is some news that could affect the market:

CANADA INFLATION DATA

Canadian consumer prices registered their sharpest decline in nearly 50 years in October, dropping 1 percent from September as gasoline prices plummeted from recent high levels, Statistics Canada said on Friday.

TORONTO-DOMINION BANK

RBC cuts Toronto-Dominion Bank to underperform from sector perform and reduces price target to C$49 from C$53. TD Bank said on Thursday that the "dramatic" lack of liquidity in global credit markets will prompt charges of C$350 million for credit-trading losses, reducing its fourth-quarter earnings.

OILEXCO

Oilexco Inc, a Canadian oil explorer that operates in the North Sea, says it has abandoned plans to raise as much as $150 million selling convertible debentures and to issue 20 million shares because its board considered the move too dilutive.

SEARS CANADA

Sears Canada is expected to report third-quarter results on Friday.

OIL ABOVE $50

Oil rose above $50 a barrel, rebounding from a 3-1/2 year low, helped higher by rallies in European and Asian equities on talk China may cut interest rates later in the day.

GOLD CLIMBS, BASE METALS MOSTLY HIGHER

Gold gained as the dollar weakened against the euro and oil prices climbed higher, while platinum rallied in erratic trade. Base metals were mostly higher.

RESEARCH ROUNDUP

UBS cuts Kinross Gold Corp's price target to $13 from $14, with a buy rating, and cuts Teck Cominco Ltd price target to C$11.50 from C$14 with a buy rating.

WORLD STOCK RALLY

World stocks rebounded from a 5-1/2 year low on Friday and oil rose above $50 a barrel as expectations of further interest rate cuts helped to cushion deepening gloom about the broader economy.

DEFLATION CONCERNS

Euro zone demand is falling and price pressures vanishing, business surveys showed on Friday, while central bankers weighed the bleak prospect of deflation.

($1=$1.28 Canadian)

(Reporting by Jennifer Kwan, Editing by Chizu Nomiyama)