Bay Street Seen Opening Weak

(RTTNews) - Canadian shares are likely to open on a negative note Monday morning, weighed down by weak commodity prices and European stocks, and on escalating tensions in the Middle East.

Israeli military intensified its military operations against Hezbollah in Lebanon on Sunday, targeting numerous sites following the killing of the group's leader, Sayyed Hassan Nasrallah.

It is feared that Israel's increased attacks against Hezbollah in Lebanon and Houthi in Yemen may bring the region one step closer to a much wider conflict involving Iran and the United States.

On the Canadian economic front, S&P Global will release a report on Canadian manufacturing activity in the month of September at 9:30 AM ET. The S&P Global Canada Manufacturing PMI rose to 49.5 in August from 47.8 in July, signaling the softest contraction in operating conditions since March, and extending the decline to 16 months.

The Canadian market ended moderately lower on Friday after showing a lack of direction early in the session. The weakness among Canadian stocks may partly have reflected profit taking after the S&P/TSX Composite Index reached a new record closing high on Thursday.

The S&P/TSX Composite Index ended down 77.01 points or 0.3% at 23,956.82 after spending early trading bouncing back and forth across the unchanged line.

Asian stocks ended mixed on Monday, with mainland Chinese and Hong Kong markets closing sharply higher on stimulus euphoria while Japanese markets succumbed to selling pressure after Japan's governing party chose Shigeru Ishiba, a critic of the country's longstanding ultralow interest rates, as its leader.

China's factory activity shrank for a fifth straight month in September but there was some improvement in the overall economic sentiment, an official survey showed.

European stocks are down in negative territory, drifting lower after a weak start, amid escalating tensions in the Middle East. Investors are also awaiting comments from ECB President Christine Lagarde and Fed Chair Jerome Powell for additional clues on the rate outlook.

In commodities, West Texas Intermediate Crude oil futures are down $0.28 or 0.41% at $67.90 a barrel.

Gold futures are down $5.20 or 0.19% at $2,662.90 an ounce, while Silver futures are lower by $0.281 or 0.88% at $31.535 an ounce.