Oil prices seen tugging Toronto stocks two ways
Date: 07-Jul-04
Country: CANADA
Crude oil - which rose on supply disruptions in Iraq and Nigeria - is a component of almost every sector of the economy, and higher oil prices immediately erode corporate profits.
"Overall I'm not seeing anything in the TSX that will give it an upward lift," said Shooshan Danagoulian, Canadian economist with IDEAglobal.
"Factors that are combining to bring market down are the rising interest rates, the increased threat of terrorism and the bearish mood in the energy market."
Among material issues, Iamgold Corp. (IMG.TO: Quote, Profile, Research) and Wheaton River Minerals Ltd. (WRM.TO: Quote, Profile, Research) will take the spotlight as the shareholders of the two precious metal producers get set to vote on Iamgold's C$2.3 billion ($1.7 billion) bid for Wheaton yesterday morning at separate meetings in Toronto.
Although both sets of management have backed the deal, shareholders could still scupper it and open the door to hostile offers for both companies from U.S.-based bidders.
Techs may receive a boost from Research In Motion (RIM.TO: Quote, Profile, Research) , after the company said it expects to launch a Chinese-language version of its BlackBerry wireless e-mail device soon.
Shares of Nortel Networks Corp. (NT.TO: Quote, Profile, Research) may prove to be the wild card, with investors punishing the company after last week's negative report that said it manipulated books to show a profit in 2003 and other investors hunting for bargains after a two-session sell-off.
The Toronto Stock Exchange S&P/TSX composite index closed down 1.31 points, or 0.02 percent, at 8,486.00 this week.
About 90 minutes before markets opened, S&P Futures were down 6.90 points, which normally indicates a lower start to trading.
