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TSX Ends Lower Amid Eurozone, Economic Growth Concerns - Canadian Commentary

4/10/2012 4:31 PM ET

Canadian stocks continued its slide for a fifth straight day, closing at a 3-month low Tuesday, mostly on global cues as eurozone debt concerns returned and on renewed apprehensions over global economic growth slowdown.

Soft trade data out of China earlier today and some disappointing jobs data from the US last week renewed global economic growth concerns. China unexpectedly swung to a trade surplus in March, but data showed the world's second-biggest consumer's import growth eased back from a 13-month peak while exports grew faster than expected.

Concerns over the eurozone debt crisis resurfaced as yields on government bond auctions in Italy and Spain soared. The 10-year Italian bonds rose 31 basis points to 5.67 percent, the highest level since mid February. Meanwhile, yields on government bonds in Spain rose to its highest point since end November, increasing 19 basis points to 5.93 percent, just short of the closely-watched 6 percent.

Toronto's main index, the S&P/TSX, closed Tuesday at 11,935.29, down 83.21 points or 0.69 percent. The S&P/TSX Composite Index touched an intraday high of 12,032.67 and a low of 11,868.97.

The TSX Venture Index closed at 1,431.10, down 17.55 points or 1.21 percent. The index opened at 1,449.90 compared to its previous close of 1,448.65.

Most major components of the S&P/TSX Index were in in the red, but the Metals & Mining and the Materials Indices were among the gainers. Among the major decliners were the Energy Index and the Industrials Index.

The Diversified Metals & Mining Index jumped 2.60 percent with First Quantum Minerals Ltd. (FM.TO) jumping 8.92 percent and Gabriel Resources Ltd. (GBU.TO) gaining 6.89 percent. Teck Resources (TCK_B.TO) gained 1.36 percent, while Lundin Mining Corp. (LUN.TO) dropped 1.41 percent. Orbite Aluminae Inc. (ORT.TO) dropped 5.38 percent.

The Energy Index plunged 1.76 percent with Light Sweet Crude Oil futures for May, dropping $1.44 or 1.4 percent to close at $101.02 a barrel on the NYMEX Tuesday.

Among energy stocks, Suncor Energy Inc. shed 2.11 percent, Canadian Natural Resources Limited (CNQ.TO) dropped 1.23 percent. Encana Corp. (ECA.TO) surrendered 1.62 percent, and Talisman Energy Inc. (TLM.TO) slipped 3.49 percent.

Calfrac Well Services (CFW.TO) shed 3.96 percent, while Trican Well Services (TCW.TO) shed 2.28 percent each.

The Financial Index dropped 0.94 percent with Manulife Financial Corp. (MFC.TO) down 3.06 percent, Royal Bank of Canada (RY.TO) shedding 0.97 percent, and Bank of Nova Scotia (BNS.TO) surrendering 1.24 percent. The Toronto-Dominion Bank (TD.TO) shed 0.48 percent.

Smartphone maker Research In Motion (RIM.TO) edged up 0.31 percent, while transportation systems maker Bombardier (BBD.B.TO) shed 1.99 percent.

Bombardier opened a new office in Shanghai, which will be home to the Bombardier Commercial Aircraft teams working with the Commercial Aircraft Corporation of China Ltd., Bombardier Aerospace's Supply Chain organization in China. It is the headquarters for the Bombardier Commercial Aircraft sales and marketing team for China and North Asia.

Gold stocks were trading higher with gold futures for June delivery moving up $16.80 or 1.0 percent to close at $1,660.70 an ounce Tuesday on the NYMEX. The Global Gold Index surged 2.20 percent.

Among gold stocks, Eldorado Gold Corporation (ELD.TO) gained 1.26 percent, Kinross Gold Corp. (K.TO) was up 1.84 percent, and Yamana Gold Corp. (YRI.TO) gathered 3.91 percent. Lake Shore Gold Corp. (LSG.TO) moved up 2.17 percent, while Goldcorp. (G.TO) gained 1.76 percent. Barrick Gold Corp. (ABX.TO) moved up 2.16 percent.

The Materials Index advanced 1.45 percent mostly on the strength of gold mining stocks. Potash Corporation of Saskatchewan Inc. (POT.TO) dropping 2.00 percent and Uranium One Inc. (UUU.TO) shedding 1.54 percent. Eastern Platinum Limited (ELR.TO) dropped 3.90 percent.

Oil and gas industry services provider GASFRAC Energy Services (GFS.TO) plummeted 21.35 percent after announcing revenues and profit before income taxes for the first quarter of 2012 are expected to be lower than the fourth quarter of 2011.

TriOil Resources Ltd. (TOL.V) plunged 11.80 percent despite reporting a narrower fourth quarter net loss of C$13.19 million or C$0.37 per share compared to C$37.93 million or C$1.38 per share last year.

Precious metals miner Premier Gold Mines (PG.TO) added 5.10 percent after revealing plans to acquire the high-grade Cove Gold Project in Nevada for approximately $28 million.

Augusta Resource Corp. (AZC.TO) moved up nearly 10 percent after announcing the receipt of major permit for Rosemont Copper project

In economic news from south of the border, the U.S. Commerce Department's figures indicate the level of inventories for wholesalers at a seasonally adjusted level of $478.9 billion in February, reflecting a 0.9 percent increase from January levels. Most economists had expected a more modest 0.6 percent increase in inventories. The January figures, which had initially shown a 0.4 percent increase in inventories, were upwardly revised to show 0.6 percent growth.

From the eurozone, Germany's merchandise trade surplus increased more than economists expected in February, data from the Federal Statistical Office showed. The trade surplus increased to euro 14.7 billion in February from euro 11.9 billion a year earlier. Economists expected a trade surplus of euro 12 billion. On a seasonally adjusted basis, the trade balance was a surplus of euro 13.6 billion.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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