TSX appears headed for slightly higher open despite lower commodities prices

TORONTO – The Toronto stock market appears ready to start the month slightly higher with commodities down slightly while stress tests of Spain’s banking sector were received with cautious optimism.

The Canadian dollar gained 0.05 of a cent to 101.76 cents US.

The results of an independent audit of 14 Spanish banks were released after the market close on Friday and showed the lenders need an extra €60 billion (US$77.6 billion) in capital. The figure is roughly as expected and well within the €100 billion in rescue loans that Madrid can get from fellow eurozone countries to help the banks.

But there’s still concern that Moody’s ratings agency could downgrade Spain’s debt rating to junk status.

Meanwhile, the latest reports on several global manufacturing showed that economies are still under pressure. China’s Purchasing Managers’ Index for September came in at 49.8, marking a further contraction in activity in the region.

The eurozone’s manufacturing sector experienced a better month, though its September PMI still contracted for the 14th consecutive month.

A reading on the U.S. manufacturing sector is due at 10 a.m. ET.

On Wall Street, Dow futures were up 66 points at 13,421. The broader S&P 500 futures were six points higher at 1,441 and the Nasdaq futures were up 16 points at 2,808.

In commodities, November crude on the New York Mercantile Exchange moved down 13 cents to US$92.06 a barrel.

December gold bullion increased $4.30 to US$1,778.20 an ounce, while December copper was down nearly one cent at US$3.75 a pound.

In Europe, Germany’s DAX stock index rose 1.3 per cent to 7,307.27 and France’s CAC-40 was up 1.5 per cent to 3,405.43. Britain’s FTSE 100 rose one per cent to 5,800.63 while Spain’s Ibex was up 0.6 per cent at 7,752.10

In Asia, markets in China, Hong Kong and South Korea were closed for public holidays. In Tokyo, Japan’s benchmark Nikkei 225 index fell after a closely watched survey showed confidence in the economy weakening.

The Nikkei 225 index shed 0.8 per cent to 8,796.51. Toyota Motor Corp. lost 1.7 per cent and Nishimatsu Construction Co. slid 4.2 per cent.