The Toronto stock market appeared set for a higher open Thursday as commodity prices picked up amid some better-than-expected German economic figures.
Germany’s Ifo Institute reported that its monthly confidence index for Europe’s biggest economy rose slightly to 106.6 in November from 106.4 the previous month. The reading helped calm nerves in the markets, a day after Germany suffered one of its worst bond auctions since the creation of the euro in 1999.
The Canadian dollar was up 0.38 of a cent to 95.75 cents US.
Trading volumes were expected to be fairly light as U.S. markets were closed for the Thanksgiving holiday. U.S. markets will be open Friday, but close early at 13:00 ET.
Despite the positive German data, the main focus in the markets remained Europe’s debt crisis. Fitch on Thursday downgraded Portugal to junk bond status, making it even more difficult for the bailed-out country to return to the bond markets.
Fitch cited Portugal’s large fiscal imbalances, its high indebtedness across all sectors and an adverse macroeconomic outlook in reducing Portugal’s credit rating to BB-plus.
The Toronto market tumbled 223 points on Wednesday in the wake of a failed German bond auction and another warning that France may see its triple A credit rating downgraded.
Although German and French borrowing rates are well below the seven per cent level that eventually forced Greece, Ireland and Portugal into seeking financial bailouts, they have been rising markedly in recent days.
Lower crude inventory figures for the U.S. supported oil prices.
The January crude contract rose 68 cents in electronic trading on the New York Mercantile Exchange to US$96.85 a barrel.
Crude supplies fell by 6.2 million barrels last week and are about eight per cent below levels a year earlier, the Energy Department’s Energy Information Administration said Wednesday.
Metal prices also advanced with the December copper contract ahead two cents to US$3.30 a pound while the December gold contract rose $3.20 to US$1,699.10 an ounce.
European markets were higher with London’s FTSE 100 index ahead 0.66%, Frankfurt’s DAX gained 1.69% while the Paris CAC 40 rose 1.78%.
Earlier in Asia, the Nikkei 225 index in Tokyo, reopening after a one-day public holiday in Japan, fell 1.8%, Hong Kong’s Hang Seng posted a 0.4% gain while South Korea’s Kospi closed 0.7% higher.
Mainland China’s benchmark Shanghai Composite Index ended a six-session losing streak to gain 0.1% amid speculation that China’s central bank is preparing to ease its tight monetary policy in favour of a pro-growth one.
In corporate news, Sherritt International Corp. (TSX:S) said its long-time chief executive, Ian Delaney, is retiring at the end of the year. Delaney will remain chairman of the Toronto-based mining company while Sherritt’s chief financial officer, David Pathe, will replace Delaney as CEO. Sherritt has a highly diversified mining business, which includes a major coal operation in Western Canada and a major nickel mine in Madagascar.