Toronto stock market could take US housing data as a positive, move higher

TORONTO – New data on the U.S. housing industry is expected to provide some optimism for traders on Wednesday, and could send the Toronto stock market higher.

A report from the U.S. Commerce Department said that builders started construction on more homes in August, driven by the fastest pace of single-family home construction in more than two years.

Construction of new homes and apartments rose 2.3 per cent to a seasonally adjusted annual rate of 750,000 last month.

On Wednesday morning, Dow Jones industrial futures are up 23 points to 13,522. The broader S&P futures have added 1.9 points to 1,454.80. Nasdaq futures are up 5.25 points to 2,855.25.

The Canadian dollar was up 0.3 of a cent to 102.64 cents US.

The October crude on the New York Mercantile Exchange moved down 47 cents to US$94.82 a barrel.

December bullion fell $3.40 to US$1,767.80 an ounce.

Japan’s main stock market hit a four-month high Wednesday after the country’s central bank eased monetary policy to shore up fragile economic growth, but the positive momentum ground to a halt in Europe.

The Bank of Japan said it was increasing its asset purchasing fund to 55 trillion yen (US$700 billion) from 45 trillion yen to counter the strength of the Japanese currency. A strong yen makes it more difficult for Japanese companies to compete in international markets.

The Bank of Japan’s move comes days after the U.S. Federal Reserve revealed it will purchase an average of $40 billion a month in mortgage-backed securities until the economy shows significant improvement.

In corporate developments, B2Gold Corp. (TSX:BTO) plans to acquire CGA Mining Ltd. (TSX:CGA) and its producing Masbate mine in a friendly all-stock deal they value at $1.1 billion.

In Europe, the FTSE 100 index of leading British shares was flat at 5,871 while Germany’s DAX was down 0.1 per cent at 7,342. The CAC-40 in France was also 0.1 per cent lower at 3,508.

Earlier in Asia, stocks were generally fairly buoyant after the Bank of Japan’s easing announcement.

Hong Kong’s Hang Seng climbed 1.2 per cent to 20,841.91 and Australia’s S&P/ASX 200 added 0.5 per cent to 4,418.40. South Korea’s Kospi gained 0.2 per cent to 2,007.88. The Shanghai Composite Index rose for the sixth straight trading day, up 0.4 per cent to 2,067.83. The Shenzhen Composite Index gained 0.7 per cent to 865.73.