Source: The Canadian Press
The Toronto Stock Exchange appeared headed for a lower open Monday as commodity prices weakened amid faltering confidence that Greece can meet its debt obligations and avoid running out of funds as early as next month.
Dow Jones futures shed 153 points to 1,1293. The Nasdaq futures lost 32.25 points to 2,275 and S&P futures lost 19.8 points to 1,192.
The Canadian dollar was off 0.49 of a cent to 101.66 cents US.
Oil prices were down 88 cents to US$87.08 a barrel. Gold prices added US$3.10 to $1,817.80 an ounce. Copper prices slid 12 cents to US$3.81 a pound.
With Prime Minister George Papandreou cancelling a trip to the United States and the Greek cabinet meeting to come up with fresh austerity measures, investors remain concerned that the country will not get its hands on the €8 billion (US$11.01 billion) due from last year’s €110 billion bailout.
On Friday, eurozone finance ministers in Poland decided to delay authorizing the pay out until early October. At risk are not only the instalment from the 2010 rescue package but also a second bailout worth euro109 billion.
“Coming together all in one place seemed to highlight the level of disunity amongst those that have the authority to deal with the problem,” said Louise Cooper, markets analyst at BGC Partners. “The slow machinations of the political class are just not keeping up with the economic and financial reality on the ground.”
Greece’s finance minister, Evangelos Venizelos, is due to host a teleconference later Monday with representatives of the country’s international creditors, the European Commission, the European Central Bank and the International Monetary Fund. His task is to convince them that Greece is doing enough to warrant the release of the next batch of bailout cash.
While investors keep a close watch on the internal debate in Greece, they are also monitoring developments in Germany after Angela Merkel’s government suffered a big electoral defeat in Berlin, which more or less wiped out her FDP coalition partners.
European stocks retreated with Germany’s DAX down 2.5% while France’s CAC-40 fell 2.7%. The FTSE 100 index of leading British shares was 1.9% lower.
Investors will also be closely watching Wednesday’s interest rate policy announcement from the U.S. Federal Reserve.
Some expect the Fed to introduce new measures to help boost the economy, which is seeing a slowdown in growth. But, many analysts think the Fed will fall short of announcing another monetary stimulus program given inflation levels remain relatively elevated.
On the Canadian calendar this week, investors can expect to see data on leading indicators, wholesale trade, the consumer price index and retail trade figures.
In Asia, Hong Kong’s Hang Seng index plunged 2.8% to 18,917.90, while South Korea’s Kospi index fell 1% at 1,820.94. China’s main index in Shanghai ended 1.8% lower at 2,437.79.