Toronto stocks headed for a higher open on Friday, reversing some of the previous session's sharp losses, as a rally in oil prices and merger and acquisition frenzy help the resource-laced market shake off concerns over interest rate hikes in commodities-hungry China.
On the M&A front, mining company Dynatec Corp. will be in the spotlight after rival Sherritt International Corp. launched a friendly takeover bid worth C$1.6 billion.
"The mining sector is ripe for a series of takeovers," said Joe Ismail, technical analyst at Maison Placements Canada. "We will see the consolidation wave reaching the junior gold miners as well as the junior energy stocks in the next 12 months."
In the telecom sector, BCE Inc. will be in focus again after The Globe and Mail said New York-based private equity firm Kohlberg Kravis Roberts is eyeing control of one-third of the company. Earlier this week, BCE said it was in talks with major Canadian pensions funds and KKR over a potential going private transaction.
Also on the mergers and acquisition front, Groupe Laperriere & Verreault will attract investor attention after saying it will sell its mineral business to Danish engineering group FLSmidth for about C$950 million and spin off to shareholders its water treatment and pulp and paper units.
On the commodities front, the TSX energy group, which makes up nearly 30 percent of the composite index, will find support in buoyant oil prices. U.S. crude oil futures gained 80 cents, to $62.63, bouncing back from a recent slump.
On the earnings front, Corel Corp. will be in focus after reporting a larger quarterly loss after the bell on Thursday as operating expenses surged, but the results still topped forecasts.
The S&P/TSX composite index tumbled 1 percent, or 137.26 points on Thursday, to close at 13,574.70 as fears of interest rate hikes in China that could dampen demand for commodities sent Toronto's main index retreating from record highs, along with other major equities market around the world.
($1=$1.13 Canadian)
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