Toronto stocks set to dip amid soft oil, gas prices

Toronto stocks set to dip amid soft oil, gas prices

Toronto stocks were poised to open lower on Wednesday, as weakening crude oil and natural gas prices drag down shares of energy companies, while investors digest quarterly results from aluminum giant Alcan Inc. and Nova Chemicals Corp..

Alcan said it swung back to profit in its fourth quarter, driven by higher aluminum prices and as the company avoided the same type of charges that caused a loss in the year earlier period, and said it expects its cash from operations this year to top the record $3 billion posted in 2006.

“We’re getting mixed feelings on Alcan’s results. Some investors will view that the results are not meeting their expectations, so they might want to cash out a bit,” said Joe Ismail, technical analyst at Maison Placements Canada.

“The stock had a good run yesterday, so it could end up a tad lower on the day on profit taking. But the trend is still positive for the company,” Ismail said.

Alcan stock closed at C$59.94 on Tuesday, up almost 3 percent.

On the commodities front, the energy sector will feel the pinch of falling oil and gas prices as the market awaited for the U.S. weekly inventories data expected later in the day.

U.S. crude oil futures were down 31 cents, at $56.65 following Tuesday’s sharp rally.

In the financial sector, AGF Management Ltd. could fall after reporting a 25-percent drop in quarterly profit amid higher expenses related to increased provisions for loan losses at its Trust Company Operations segment.

Nova will also be in focus after it said its fourth-quarter loss widened due to a huge one-time charge related to a write-down of assets.

The tech sector could see downward pressure after contract electronics maker Celestica Inc. posted a wider fourth-quarter loss after the bell on Tuesday, weighed down by restructuring charges and dwindling demand from telecom customers.

Mitec Telecom will also attract investors’ attention. It said it would close its U.S. operations and focus its North American operations in its Montreal base in a bid to return to profitability.

The S&P/TSX composite index added 68.64 points, or 0.5 percent on Tuesday, to close at 13,014.60, as shares of oil and gas companies rallied along with crude oil prices.

($1=$1.18 Canadian)

Source: Reuters

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