TSX heads for lower open as commodities slide

Falling prices for oil and metals pushed the commodity-sensitive Canadian dollar down 0.43 of a cent to 100.15 cents US.

U.S. futures were in the red as the Dow Jones industrial futures lost 89 points to 12,872, the Nasdaq futures fell 20.25 points to 2,595.75 and the S&P 500 futures were down 10.9 points to 1,353.5.

Concerns about China’s slowing growth continued to dampen sentiment after China’s premier Wen Jiabao announced that the country was targeting a lower growth rate of 7.5%, compared with eight per cent before.

“That, in itself, isn’t terrible but it fed fears of a global growth slowdown,” said BMO Capital Markets senior economist Jennifer Lee.

Strong Chinese growth has been an important prop for a global economy still struggling to recover from the 2008 financial crisis, and that growth has also supported higher commodity prices and rising stock prices on the resource-heavy Toronto stock market.

Copper was among the biggest commodity losers Tuesday, as the May contract on the New York Mercantile Exchange lost six cents to US$3.80 a pound on top of a four cent loss Monday amid demand concerns. China is the biggest consumer of the metal, widely viewed as an economic barometer because it is used in so many businesses.

The April crude contract on the Nymex was down 57 cents to Us$106.15 a barrel.

Bullion also lost ground as the April contract lost $13.10 to US$1,690.80 an ounce.

Greece will also be on investors’ radars ahead of Thursday’s expected announcement of the level of participation in the country’s bond swap. The so-called Private Sector Involvement, or PSI, is an integral part of Greece’s second bailout without which the country could default.

On Monday, the banking group leading negotiations on behalf of the creditors said that 12 of the largest investors have committed to participating in the plan.

The success of the deal depends on high participation.

Traders also took in a strong earnings report from Scotiabank (TSX:BNS). The bank’s quarterly profits rose to $1.44 billion, or $1.20 per share, up from $1.25 billion or $1.08 per share a year ago. Revenue grew to $4.64 billion from $4.19 billion.

Scotiabank also upped its dividend by three cents a share to 55 cents.

In other earnings news, Uranium One Inc. (TSX:UUU) improved its fourth-quarter results in 2011 helped by the absence of a series of one-time items booked a year earlier. The company, one of the world’s largest publicly traded uranium producers, posted a $1.1-million loss in the fourth quarter, or nil per share, compared to a $112.9 million loss a year ago. Revenue grew to $157.9 million from $152.3 million.

European bourses also sharply declined with London’s FTSE 100 index down 0.93%, Frankfurt’s DAX lost 1.41% and the Paris CAC 40 dropped 1.53%.

Earlier in Asia, mainland Chinese shares saw their biggest loss in almost a month a day after the lowering of the country’s economic growth target. The benchmark Shanghai Composite Index lost 1.4% while the Shenzhen Composite Index for China’s second smaller stock market lost one per cent.

Elsewhere, Japan’s Nikkei 225 index dropped 0.6% and South Korea’s Kospi shed 0.8% while Hong Kong’s Hang Seng lost 2.2%.