The Toronto stock market appeared set for a higher start on the first day of February trading as commodity prices advanced amid positive economic data from China.
The Canadian dollar traded above parity with the greenback, up 0.33 of a cent to 100.05 cents US.
U.S. futures were also higher with traders also encouraged by employment data two days before the release of the U.S. non-farm payrolls report for January. Payroll firm ADP said Wednesday that the American private sector created 170,000 jobs during the month. Economists were looking for the U.S. economy to have created a total of 150,000 jobs during January.
The Dow Jones industrial futures jumped 86 points to 12,663, the Nasdaq futures rose 19.25 points to 2,483.5 and the S&P 500 futures were up 11.6 points to 1,319.8.
In China, two surveys gave mixed signals on manufacturing activity in January but both showed it largely unchanged.
The state-affiliated China Federation of Logistics and Purchasing said its purchasing managers index rose 0.2 points to 50.5 from December’s 50.3 on a 100-point scale on which numbers above 50 indicate growth.
HSBC Corp. said its HSBC China Manufacturing PMI was little changed at 48.8 from December’s 48.7, suggesting a “moderate deterioration.”
The Chinese government moved to slow the economy during 2011 to deal with high inflation, partly through tightening lending requirements at banks.
“Both indicators suggest China’s economy is coming in for a soft landing, taking a step further toward dispelling hard landing concerns,” said BMO Capital Markets senior economist Benjamin Reitzes.
The Chinese government also announced stimulus for the struggling private business sector in the form of a US$2.5 billion fund to finance new small businesses and promising tax breaks and more lending for entrepreneurs.
China has been a main pillar of support for a global economy still struggling to recover from the financial crisis and subsequent recession of 2008. Its strong economic growth has been a big plus for oil and metal prices and commodity stocks on the resource-heavy TSX.
Commodity prices advances following the Chinese data with March crude on the New York Mercantile Exchange ahead 49 cents to US$98.97 a barrel.
Metals also advanced with the March contract for copper ahead two cents to US$3.81. China is the largest consumer of copper, which is viewed as an economic bellwether because it is used in so many businesses.
Bullion prices were also higher with the April gold contract in New York up $11.40 to US$1,751.80 an ounce.
Meanwhile, there were signs that the European debt crisis has eased, for now. EU leaders agreed this week to push ahead with a closer fiscal union and borrowing rates for Italy and Spain are down sharply from just a couple of months ago, suggesting increased investor confidence.
Much hinges on Greece, where the outlook also appeared brighter. Hopes were growing that a debt-reduction deal between the country and its private creditors will be concluded soon alongside a second bailout from the eurozone and the International Monetary Fund.
European markets were sharply higher as other data showed the final reading of the most recent purchasing managers index was revised slightly upward to 48.8.
Not the best result, but still a five-month high and the second consecutive monthly improvement,” added Reitzes.
“Europe is likely in recession, but the depth of the recession appears to be limited, at least for now.”
London’s FTSE 100 index climbed 1.45%, Frankfurt’s DAX gained 2.32% and the Paris CAC 40 rose 1.54%.
Earlier in Asia, Tokyo’s Nikkei 225 edged up less than 0.1% but Hong Kong’s Hang Seng ended down 0.3%. Mainland China’s main index in Shanghai also fell 1.2%.
On the earnings front, Suncor Energy Inc. (TSX:SU) reported quarterly earnings of $1.43 billion or 91 cents a share amid higher oil prices. Revenues for the quarter were $10.1 billion versus $9.3 billion a year earlier. Suncor also said crude is starting to flow out of its Libyan operations following a bloody civil war in the North African country.
Meanwhile, Facebook was expected to file as early as Wednesday to sell stock on the open market. Its debut is likely to be the most talked-about initial public offering since Google in 2004. The company expects to raise as much as US$10 billion, though some accounts say it could be less than that. At $10 billion, the company would be valued at $75 billion to $100 billion.