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TSX Dives As Commodities Falters, Royal Bank Dips - Canadian Commentary

Toronto stocks snapped their two-session winning streak to linger deep in the red Tuesday morning amid sell-offs in financial and commodities stocks. Commodity prices are looking to the release of minutes the March Federal Reserve policy meeting for direction.

The S&P/TSX Composite Index lost 105.50 points or 0.84 percent to 12,401.56, after gaining nearly 170 points or 1.40 percent in the past two sessions.

Financial stocks were under selling pressure after the Commodity Futures Trading Commission filed a civil lawsuit against Royal Bank.

Royal Bank (RY.TO) shed nearly 3 percent. Separately, the bank said it would acquire the remaining 50 percent stake in the joint venture RBC Dexia Investor Services Ltd. from Banque Internationale à Luxembourg S. A. for C$1.1 billion, in cash.

CIBC (CM.TO), TD Bank (TD.TO) and Scotiabank (BNS.TO) were down around 1 percent each.

The Diversified Materials Index lost nearly 3 percent. Ivanhoe Mines (IVN.TO) dived nearly 9 percent Yesterday, the company said it would sell its stake in Mongolian coal miner SouthGobi Resources Ltd. (SGQ.TO) to Aluminum Corporation of China Ltd., known as Chalco, for about C$900 million, or C$8.48 per share. Shares of SouthGobi skyrocketed eased 1 percent to C$7.40.

Teck Resources (TCK_B.TO) was down nearly 2 percent.

The price of crude oil was paring previous session's gains Tuesday morning amid lingering worries over demand growth. Crude for May shed $0.45 to $104.78.

In the oil patch, Niko Resources (NKO.TO) and Tourmaline Oil (TOU.TO) were down over 3 percent each.

Senior independent energy company Canadian Natural Resources (CNQ.TO) slipped over 1 percent after revealing the resignation of Allan Markin, effective April 2, 2012, as a Director and as Chairman of the Board. The company appointed Murray Edwards, currently Vice Chairman, as Chairman of the Board of Directors, effective April 2, 2012.

Meanwhile, oil and gas company Bonterra Energy (BNE.TO) edged up 0.30 percent after announcing that Randy Jarock will retire from his positions of President and Chief Operating Officer of the company effective June 30, 2012.

The price of gold edged down even as the U.S. dollar was ticking lower ahead of the release of FOMC minutes, due out later today. Gold for June eased $5.20 to $1674.50.

Among gold plays, Royal Gold (RGL.TO) and Goldcorp. (G.TO) surrendered over 1 percent each.

Food and beverages company Molson Coors Brewing Co. (TPX_A.TO) lost nearly 2 percent after it said it would acquire StarBev for 2.65 billion euros, or $3.54 billion.

Lorus Therapeutics (LOR.TO) dived 6 percent. The bio-pharmaceutical company announced the presentation of new preclinical data for Lorus' anticancer drug, LOR-253. The data supports the treatment of lung and colon cancers with LOR-253 in combination with a variety of chemotherapy agents. Yesterday, the stock shed 10 percent to C$0.250.

In economic news from the U.S., the Commerce Department figures put the February estimate of new manufacturing orders at $468.4 billion, a 1.3 percent increase from January levels. And while most economists had predicted a rebound following the 1.1 percent decline in January - initially reported as a 1 percent decline - many had hoped for a slightly more robust 1.5 percent increase.

Elsewhere, euro zone producer price inflation eased to 3.6 percent year-on-year in February from a revised 3.8 percent in January, Eurostat said. The inflation rate, nonetheless, stayed above the consensus forecast of 3.5 percent. On a monthly basis, the industrial producer price index climbed 0.6 percent, following a 0.8 percent gain in January. Economists were expecting an increase of 0.5 percent.

by RTT Staff Writer

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