[TORONTO, ON] – The Toronto stock market headed for a higher open Monday amid some economic data from China that beat expectations over the weekend.
The Canadian dollar gained 0.16 of a cent to 102.27 cents US as risk appetite increased amid rumours that China's central bank could cut banks' reserve requirements to encourage lending.
U.S. futures were also higher as Citigroup turned in a positive earnings report. Earnings per share for the third quarter, excluding extraordinary items, came in at $1.06, a dime better than analyst estimates. Revenue, after special charges, was $19.4 billion, beating expectations of $18 billion.
The earnings season kicks into high gear this week with 40 per cent of the Dow components reporting.
Economic data on tap includes September retail sales data and a key manufacturing index for the New York area.
The Dow Jones industrial futures were up 47 points to 13,292, the Nasdaq futures gained 17.2 points to 2,727.2 while the S&P 500 futures were ahead 6.7 points to 1,428.2.
Data released Sunday showed that China's consumer price index for September rose 1.9 per cent from a year earlier, down from a two per cent advance during August.
Another report released late Friday after North American markets closed showed that China's international trade surplus widened to $27.7 billion. Exports unexpectedly jumped 9.9 per cent year over year, which was the best pace in three months.
"The figures are certainly encouraging and suggest that exports may have bottomed early in Q3, as the growth rate accelerated in each of the past two months," said BMO Capital Markets senior economist Benjamin Reitzes.
"However, we'll need to see the rest of the September figures before making that assertion for the broader economy."
China's third quarter economic growth data will be released Friday. GDP growth is expected to ease to 7.4 per cent year over year, which would be the slowest pace since the first quarter of 2009. China has taken a series of steps over the last couple of years to slow its red-hot economy in order to get a grip on unacceptably high inflation levels.
Oil prices were up slightly with the November contract on the New York Mercantile Exchange ahead 19 cents to US$92.05 a barrel.
Copper prices failed to find lift from the Chinese data with the December contact unchanged at US$3.70 a pound.
The December bullion contract declined $11.60 to US$1,748.10 an ounce.
The Toronto market sustained a 1.74 per cent slide last week as buyers were discouraged by another downward revision to global economic growth by the International Monetary Fund.
Traders also took in major acquisition activity in the telecom sector. Japan's Softbank Corp. has reached a deal to buy 70 per cent of U.S. mobile carrier Sprint Nextel Corp. for US$20.1 billion. The agreement will combine the third biggest mobile carriers of both Japan and the U.S.
The news of the deal, which leaked late last week, had spooked investors worried about such a big investment and sent Softbank shares lower by about a third in recent sessions.
In Canada, simulator company CAE Inc. (TSX:CAE) has won a series of military contracts valued at approximately C$200 million, including two awarded by the United States.
European bourses were positive ahead of a meeting of European Union leaders Thursday and Friday, with Greece and Spain likely to share the spotlight.
Investors want clarity over whether the Greek government's latest package of spending cuts has convinced debt inspectors to approve the payout of the country's next batch of bailout cash. They also want an end to the uncertainty over whether Spain will tap a new bond-buying facility from the European Central Bank.
London's FTSE 100 index gained 0.55 per cent, Frankfurt's DAX was up 0.82 per cent while the Paris CAC 40 climbed 1.4 per cent.
Earlier in Asia, Japan's Nikkei 225 index rose 0.5 per cent, Hong Kong's Hang Seng rose less than 0.1 per cent while South Korea's Kospi fell 0.4 per cent.
However, mainland China's Shanghai Composite Index lost 0.3 per cent and the smaller Shenzhen Composite Index lost 0.7 per cent.
