The Toronto stock market headed for a sharply lower open Monday amid concerns that Spain will need a full-scale sovereign bailout while traders took in two major acquisitions in the Canadian energy sector.
The S&P/TSX Composite index fell 42.79 points Friday to 11,622.91
The Canadian dollar dipped 0.58 cents Monday morning to 98.03 cents U.S.
Among stocks to watch this morning, China National Offshore Oil Company is picking up Calgary-based oil and gas producer Nexen Inc. for $15.1 billion U.S. in cash. CNOOC is paying $27.50 a share, a 61% premium on the closing price of its shares on Friday at the New York Stock Exchange.
And Talisman Energy Inc. is selling its 49% interest in U.K. North Sea assets to Chinese firm Sinopec Corp. for $1.5 billion.
In other corporate developments, regulatory filings show that investor Prem Watsa now has a 9.9% stake in BlackBerry maker Research in Motion Ltd.. Watsa is the CEO of insurer Fairfax Financial Holdings Ltd. He had earlier reported a 5.12% holding in RIM. Watsa's stake was valued at about $356.2 million, as of Friday's closing on the TSX.
ON BAYSTREET
The TSX Venture Exchange added 5.32 points Friday to 1,196.19. The Nasdaq Canada index dipped 3.89 points to 339.67.
ON WALLSTREET
Investors are bracing for an ugly start on Wall Street Monday, tracking a global selloff amid heightened fears that Spain will need a full-blown bailout.
Futures for the Dow Jones erased 182 points, or 1.4%, to 12,591, about 30 minutes before the opening bell. Futures for the S&P 500 stumbled 17.80 points, or 1.3%, to 1,340.40, and for the Nasdaq, futures tumbled 32.25 points, or 1.2%, to 2,581.
The debt crisis plaguing Europe is taking a toll on Spain's regional economies, with at least one region, Valencia, said to have requested emergency funding last Friday. A second eastern region, Murcia, denied reports that it was gearing up for its own request.
Euro-zone finance ministers finalized initial bailout terms for Spanish banks, but observers fear that may not be enough.
The yield on the 10-year Spanish bond jumped to a euro-area record high of 7.565% from 7.267% late Friday. Spain's leaders have said that 7% is an unsustainable level. It's also a level that flashes the first bailout signals.
The Bank of Spain also reported that the nation's economy contracted by 0.4% in the second quarter -- that's the third quarterly contraction and shows the euro-zone's fourth-largest economy could be mired in recession for some time.
Italy's benchmark FTSE MIB index fell 4%, while borrowing costs spiked. The 10-year Italian yield rose to 6.426% from 6.166% late Friday.
European stocks were deep in the red in morning trading. Britain's FTSE 100, the DAX in Germany and France's CAC 40 all lost about 2%.
Asian markets ended sharply lower. The Shanghai Composite fell 1.3%, the Hang Seng in Hong Kong tumbled 3% and Japan's Nikkei dropped 1.9%.
Oil futures fell $3.18, or 3.5%, to $88.65 U.S. a barrel
Gold prices lopped off $17.80, or 1.1%, to $1,565.00
