TSX may open lower as ECB lending optimism fades

Banks borrowed a whopping 489 billion euros, the highest-ever uptake from the central bank, highlighted the funding squeeze in credit markets.

FACTORS TO WATCH

Canadian equity futures pointed to a lower open.

U.S. stock index futures turned negative as doubts set in that a large take-up at the European Central Bank's three-year funding operation will ease a regional credit crunch. <.N>

European stocks reversed gains and drifted lower, as the initial enthusiasm that followed strong demand for the ECB's 3-year tender faded and fears over the region's debt crisis resurfaced. <.EU>

COMMODITY PRICE MOVES

The Thomson Reuters-Jefferies CRB index <.CRB>, a global commodities benchmark, fell 0.02 percent in early trade.

Oil prices rose to around $107 a barrel after the European Central Bank's offer of three-year loans to banks raised hopes the euro zone would avert a liquidity crisis and head towards economic recovery.

Gold rose as the euro continued its break higher versus the dollar, after a tender for cheap loans from the European Central Bank saw a greater take-up among banks than expected.

Copper prices rose to their highest levels in more than a week on an upbeat outlook for the U.S. economy and an encouraging take-up by banks from the European Central Bank's lending operation.

CANADIAN STOCKS TO WATCH

Research In Motion Ltd. : The company, which saw a 77 percent plunge in its market value in the last 12 months, has turned down overtures from Amazon.com Inc and other potential buyers because the BlackBerry maker prefers to fix its problems on its own, according to people with knowledge of the situation.

TMX Group Inc. : The Toronto Stock Exchange operator said it bought a 16 percent stake in the Bermuda Stock Exchange for an undisclosed amount.

Enbridge Inc. : Enterprise Products and Enbridge are seeking to expand their U.S. Seaway pipeline network in the race to ease a crude oil supply glut in the Midwest by shipping it to the Gulf Coast refining hub.

Longview Oil Corp. : The oil and natural gas company expects to produce more oil in 2012 than this year's target as it drilled new wells, and increased its capital spending to focus on oil projects.

(Reporting By Chandra Ramarathnam)

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