FED ACTION AND MARKET REFLECTION
Early stock market signals positive before Fed decision on interest rates
08:06:51 EDT Aug 8, 2006
Canadian Press: JAMES DALZIEL
TORONTO (CP) - Global indicators were positive for North American stock markets early Tuesday as investors awaited the U.S. Federal Reserve's latest move on interest rates.
Wall Street futures suggested a strong start for regular trading while oil prices eased lower after shooting up more than $2 US a barrel Monday after the shutdown of a major oilfield in Alaska.
Tokyo's stock market was lifted by broad buying as most Asian markets advanced.
Japan's benchmark Nikkei 225 stock index added 310.6 points, or 2.05 per cent, to finish at 15,464.66 points on the Tokyo Stock Exchange. Oil issues, electronics, steel makers, telecoms and banking stocks led the gains.
In Hong Kong, shares advanced for the fifth consecutive session amid gains by bank HSBC and China Mobile, but trading was sluggish as investors waited for a U.S. Federal Reserve meeting on interest rates. The blue-chip Hang Seng Index rose 94.65 points, or 0.6 per cent, to 17,048.2.
The Canadian dollar opened at 89.16 cents US, up 0.53 of a cent from Friday's close. The Fed is scheduled to announce its decision on interest rates at 2:15 p.m. ET, with many observers saying a pause is likely after 17 rate hikes over the past two years.
In other news:
-Crude oil prices fell Tuesday, one day after they jumped more than $2 US per barrel following the shutdown of a major oilfield in Alaska. Light sweet crude for September delivery on the New York Mercantile Exchange slipped 33 cents to $76.65 a barrel in electronic trading by midday in Europe.
-Natural gas operator Paramount Resources Ltd. (TSX:POU) reported a whopping increase in second-quarter profit late Monday as the company benefited from a one-time gain on its books from an oilsands transaction. The Calgary energy company said it earned $111.9 million or $1.65 per share for the three months ended June 30, compared with a profit of $12.9 million or 20 cents a share for the same 2005 period.
On Monday, while Canadian markets were closed for a civic holiday, near-record oil prices prompted Wall Street investors to sell stocks on inflation fears.
The Dow Jones industrial index fell 20.97 points to 11,219.38. The Nasdaq shed 12.55 points to 2,072.5.