Bay Street Seen Opening Weak; Higher Commodity Prices May Help Limit Downside

(RTTNews) - Canadian shares look headed for a weak start Monday morning, tracking a sell-off in global markets amid falling risk appetite for riskier assets due to rising tensions in the Middle East.

However, some buying may emerge in gold and energy stocks thanks to higher bullion and oil prices, and help limit market's downside.

The conflict in the region escalated further today after Israel launched airstrikes on Hezbollah targets in Beirut and other parts of Lebanon following projectile fire from Lebanese territory into northern Israel.

U.S. President Donald Trump suggested the conflict with Iran could go on for the next four weeks, raising concerns about a significant widening of hostilities in the region that could severely disrupt the global supply of crude oil and send prices soaring to levels not seen in years.

The S&P Global Canada Manufacturing PMI reading for the month of February is due at 9:30 AM ET.

Canadian stocks closed weak on Friday, giving back ground following the strong upward move seen over the three previous sessions.

The benchmark S&P/TSX Composite Index moved to the downside early in the session and remained in negative territory through the day before eventually closing down 161.97 points at 34,339.99.

Asian stocks drifted lower on Monday as investors closely monitored escalating West Asian tensions.

The major European markets are down sharply, weighed down by losses in banking and airlines sectors. Stocks from several other sectors are also reeling under selling pressure. Resources stocks are up, tracking higher commodity prices.

In commodities, West Texas Intermediate Crude oil futures are up $4.96 or 7.4% at $71.98 a barrel.

Gold futures are gaining $156.90 or 2.99% at $4,404.80 an ounce, while Silver futures are up $2.289 or 2.45% at $95.580 an ounce. Copper futures are down 0.33% at $6.0395 per pound.