TSX set to advance amid strong Chinese manufacturing data

U.S. futures were higher with the Dow Jones futures up 45 points to 15,522, the Nasdaq futures rose 8.8 points to 3,377.8 and the S&P 500 futures were up three points to 1,754.

HSBC Corp. said Friday its monthly purchasing managers’ index for China showed its best improvement in seven months, rising to 50.9 from September’s 50.2. Anything above 50 indicates expansion.

An industry group, the China Federation of Logistics and Purchasing, said its index rose to 51.4 from the previous month’s 51.1.

China’s economic growth rebounded to 7.8 per cent in the three months ended in September from the previous quarter’s two-decade low of 7.5 per cent.

Meanwhile, BMO Capital Markets looked for the October reading of the U.S. Institute for Supply Management’s manufacturing index to indicate slowing expansion, moving down to 55 from 56.2 in September.

The data will also be carefully weighed as to how it might affect the timing of the U.S. Federal Reserve in cutting back on a key stimulus program, its monthly purchases of US$85 billion of bonds.

The Fed announced earlier this week it could carry on with the program, which is credited with keeping long term rates low and therefore encouraging more people to buy equities. But there is much speculation about when the Fed might start to taper those asset purchases.

That speculation helped sent North American markets lower Thursday but ended up higher for the month.

The TSX rose 4.5 per cent during October, adding up to a 7.5 per cent gain year to date. The Dow is up about 20 per cent year to date.

Commodities were mixed with December crude on the New York Mercantile Exchange down 50 cents to US$95.88 a barrel.

The strong Chinese data helped push December copper two cents higher to US$3.32 a pound while December bullion moved $11.40 lower to US$1,312.30 an ounce.

On the corporate front, commercial real estate company Brookfield Property Partners LP is increasing its stake in General Growth Properties Inc. by paying $1.4 billion for some additional shares and warrants. The subsidiary of Brookfield Asset Management (TSX:BAM.A) will have a 32 per cent interest in General Growth if all the outstanding warrants are exercised.

A new environmental study into Taseko Mines Ltd. billion-dollar New Prosperity mine proposal in British Columbia says it would pose “several significant adverse environmental effects.“ Taseko’s (TSX:TKO) proposal received provincial approval in 2010 but the federal government rejected the original plan, which would have drained a lake of cultural significance to First Nations for use as a tailings pond.

Barrick Gold (TSX:ABX) plans to raise roughly $3 billion that it plans to use to repay debt by issuing 163.5 million shares at $18.35 per share. Its shares closed at $20.28 Thursday on the TSX.

Barrick also announced Thursday that it was suspending work on its troubled Pascua-Lama project as it moved to rein in costs in the face of lower gold prices and other problems at a mine under construction high in the Andes mountains.

Earlier in Asia, Japan’s Nikkei 225 fell 0.9 per cent, weighed down by the U.S. dollar dipping below 98 yen and an 11 per cent plunge in Sony Corp. shares after it Thursday reported a 19.3 billion yen (US$196 million) quarterly loss.

Hong Kong’s Hang Seng crept up 0.2 per cent while Australia’s S&P/ASX 200 shed 0.4 per cent and Seoul’s Kospi added 0.5 per cent to 2,039.42.

European markets were lacklustre with London’s FTSE 100 index up 0.02 per cent, Frankfurt’s DAX declined 0.22 per cent and the Paris CAC 40 lost 0.34 per cent.