The Toronto stock market appeared heading for a flat open Monday as traders digest positive Chinese manufacturing data and await a key reading of the American manufacturing sector later in the morning.
The Canadian dollar was down 0.14 of a cent to 98.29 cents US.
U.S. futures were mixed ahead of the release of the Institute for Supply Management’s manufacturing index for March. It is expected to remain flat at an 18-month high of 54.2.
“Applying a damper on activity, a greater sense of caution has probably permeated business investment owing to fiscal policy uncertainty along with the economic uncertainty posed by actual tax hikes and spending cuts,” said BMO Capital Markets senior economist Michael Gregory.
“Still, manufacturing has managed to score increases in each of the past three months. The positive momentum is partly fuelled by fabrications headed for the housing sector.”
The Dow Jones industrial futures were up 13 points to 14,510, the Nasdaq futures added three points to 2,814 while the S&P 500 futures edged up 0.3 of a point to 1,563 after the index hit a record high on Friday.
The China Federation of Logistics and Purchasing said Monday that the country’s manufacturing picked up in March in a potentially positive sign for the recovery in the world’s second-largest economy.
Its Purchasing Managers’ Index rose to 50.9 in March from 50.1 in February, which was the lowest reading in five months. Numbers above 50 denote expansion on a 100-point scale.
Chinese manufacturing is closely watched as an indicator of global consumer sales and demand for commodities such as copper and oil. High demand in the past has fuelled higher share prices for energy and mining stocks on the resource-intensive TSX.
However, despite the improvement in factory output, analysts said investors remained worried about a possible property bubble, inflation and what policies the new Chinese government might have in store.
The TSX starts the second-quarter trading period up a slight 2.5% year to date, down from highs of mid-March when the market was ahead about 3.5%, reflecting a stubbornly slow global economic recovery.
In contrast, a stream of positive economic indicators, including a resurgent housing sector, and continued stimulus measures from the U.S. Federal Reserve helped power the Dow Jones industrials to a string of record-high closes, leaving the blue chip index up almost 11.25% year to date.
On the commodity markets, the May crude contract on the New York Mercantile Exchange fell 76 cents to US$96.47 a barrel.
May copper slipped four cents to US$3.36 a pound while June bullion gained $3.50 to US$1,599.20 an ounce.
Russia’s first deputy prime minister says his government won’t protect Russian depositors who are losing money in Cyprus but may offer assistance to some Russian state companies. Big depositors at Cyprus’ largest bank, including some Russians, may be forced to accept losses of up to 60%, far more than initially estimated under the European rescue package to save the country from bankruptcy.
European markets were higher as London’s FTSE 100 index gained 0.38%, Frankfurt’s DAX added 0.08% and the Paris CAC 40 was ahead 0.53%.
The Nikkei 225 index in Tokyo declined 2.1% while South Korea’s Kospi fell 0.4%.
Markets in mainland China were mixed as the Shanghai Composite Index fell 0.1% while the Shenzhen Composite Index rose 0.6%. Markets in Australia and Hong Kong were closed for an extended Easter weekend holiday.