The Toronto stock market was set for a negative start to Thursday’s session, led by resource stocks as poor Chinese economic data depressed prices for oil and metals.
China’s export growth during September fell to 17.1 per cent over a year earlier, down from August’s 24.5%. Customs data showed that import growth also fell.
A strong Chinese economy has done much to support a shaky global economic recovery and equity and commodity markets react negatively to any sign of slowdown. This is especially so for the TSX, which is heavily weighted in oil and mining stocks.
The soft Chinese data helped depress the Canadian dollar, which moved down 0.44 of a cent to 97.86 cents US after jumping almost two cents over the last two sessions.
U.S. futures also indicated a lower start to the trading day as the Dow Jones industrial futures lost 45 points to 11,371, the Nasdaq futures were down 6.2 points to 2,290.2 while the S&P 500 futures declined six points to 1,192.
Research in Motion Ltd. (TSX:RIM) continued to be in focus as the BlackBerry maker continued to return email and texting services to normal. But co-CEO Mike Lazaridis said Thursday in a video posted on YouTube that it’s too soon to say whether the outage which has affected millions of users around the world has been fully resolved.
Demand concerns pushed the November crude contract on the New York Mercantile Exchange down $1.23 to US$84.34 a barrel.
Copper prices also lost ground while the December contract on the Nymex fell eight cents to US$3.32 a pound.
Bullion also headed lower, down $9.80 to US$1,672.80 an ounce.
Stock markets have risen sharply this week as eurozone officials have finally indicated they are willing to take decisive action such as larger write-downs on Greek debt and a push to make banks strengthen their capital against resulting losses.
New steps to quell the debt crisis are seen as positive for stocks because a disorderly default by Greece and big losses to banks on its government bonds could cause a wider banking crisis, choking off credit to the wider economy and causing a recession.
But traders are anxious for eurozone leaders to unveil details. And they likely won’t find out more until a European summit 10 days from now, which will be followed by a Group of 20 summit of rich and developing countries in early November.
Hopes for a resolution to the European debt crisis helped Asian shares overnight. Japan’s Nikkei 225 index climbed one per cent, Hong Kong’s Hang Seng jumped 2.3% and South Korea’s Kospi index rose 0.8%.
Australia’s S&P/ASX 200 gained one per cent while the Shanghai Composite Index advanced 0.8%.
European markets turned lower as London’s FTSE 100 index lost 0.95%, Frankfurt’s DAX declined 1.16% and the Paris CAC 40 was down 1.12%.
On the earnings front, J.P. Morgan Chase’s shares were down almost two per cent in pre-market trading after the bank reported that third-quarter income fell four per cent on weaker investment banking and trading results and a loss in its private equity division. The bank also set aside $1 billion for litigation tied to poorly-written mortgage loans and securities.
J.P. Morgan Chase earned US$4.3 billion, or $1.02 per share, beating estimates by 11 cents a share.