Canadian stocks looked set to open slightly higher on Tuesday, in line with stronger commodity prices, though there were signs the respite from worries over U.S. and European government debt could be temporary.
Toronto's main stock index hit its lowest level in nearly six weeks on Monday as commodity prices sagged on worries about the global economic outlook.
FACTORS TO WATCH
* Canadian equity futures pointed to a higher open.
* U.S. stock index futures were higher, indicating a market rebound following four days of losses, although persistent concerns over Europe kept investors on edge. .N
* European shares pared gains and briefly turned negative, after yields in a Spanish bill auction rose to their highest in 14 years. .EU
COMMODITY PRICE MOVES
* The Thomson Reuters-Jefferies CRB index .CRB, a global commodities benchmark, rose 0.57 percent in early trade.
* Brent crude futures rose above $107 a barrel as fresh sanctions on Iran raised the prospect of political instability in the region, offsetting the effect on the oil price of worries about the health of Western economies and their fuel demand.
* Gold recovered strongly as buyers from China saw value in lower prices and as panic over western world debt subsided in the wider financial markets, lessening the need to sell gold to raise dollar funding.
* London copper futures jumped 1.5 percent as hopes that demand from top consumer China will remain strong helped the metal rebound from one-month lows in the previous session.
CANADIAN STOCKS TO WATCH
* Magma Metals Ltd. (MMW.TO: Quote): The company said it will spin off its West Australian gold projects in a new exploration company, to be named Greenstone Metals Ltd.
Following is a summary of research actions on Canadian companies reported by Reuters.
* Bonavista Energy Corp (BNP.TO: Quote) price target raised to C$32.50 from C$31.50 at CIBC
* Pengrowth Energy Corp (PGF.TO: Quote) price target cut to C$12 from C$12.50 at CIBC
* Valener (VNR.TO: Quote) price target cut to C$16 from C$16.50 at National Bank Financial
($1= $1.03 Canadian)