The Toronto stock market appeared set for a positive open Thursday as traders look to this weekend’s summit of European leaders for strong action to deal with the government debt crisis.
The Canadian dollar was up 0.32 of a cent to 98.34 cents US.
U.S. futures were higher as the Dow Jones industrial futures gained 43 points to 11,487, the Nasdaq futures were ahead 8.2 points to 2,326.2 while the S&P 500 futures rose 4.7 points to 1,211.3.
The TSX lost 204 points on Wednesday as investors again grew skeptical about the ability of European leaders to agree on a strategy to deal with the crisis.
Seesawing expectations have resulted in the TSX swinging hundreds of points in either direction during the day recently and racking up a triple digit loss or gain for the past 10 straight sessions.
Investors hope that a summit meeting of eurozone leaders this weekend will produce a three-pronged solution to the debt crisis. That would include measures to boost the firepower of the bailout fund, a recapitalization of a large part of the banking sector and a plan to get the banks to take a bigger hit on their Greek debt holdings.
Meanwhile, Greece will get its next batch of international bailout loans but its second rescue package may not be enough to save it from bankruptcy, according to a draft of a debt inspectors’ report obtained Thursday by The Associated Press.
The inspectors from the European Commission, the European Central Bank and the International Monetary Fund also said Greece’s debt dynamics remain “extremely worrying.”
Commodities have also seen huge swings because failure to tackle the debt crisis could result in a disorderly default by Greece, play havoc with the region’s banks and derail an already fragile economic recovery, which in turn would slash demand for oil and metals.
Thursday was no different with the November crude contract on the New York Mercantile Exchange up 36 cents to US$86.47 a barrel after losing over $2 on Wednesday.
Demand worries pushed copper prices lower for a fourth day with the December contract on the Nymex down 11 cents to US$3.14 a pound.
Bullion prices also backed off for a fourth session. The December gold contract in New York fell $23.90 to US$1,623.10 an ounce.
Earlier, Asian stocks tumbled with Japan’s Nikkei 225 index losing one per cent, Hong Kong’s Hang Seng slid 1.8% and South Korea’s Kospi tumbled 2.7%. In mainland China, the Shanghai Composite Index fell 1.9% and the smaller Shenzhen Composite Index plunged 2.9%.
European markets were also lower as London’s FTSE 100 lost 0.54%, Frankfurt’s DAX fell 0.58% and the Paris CAC 40 index was down 0.3%.
In earnings news, natural gas and liquids giant Encana Corp. (TSX:ECA) said quarterly profit came in at US$120 million, down from US$606 million a year ago as the company was hit with a big currency translation loss. Revenues fell to $2.35 billion from $2.4 billion.