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TSX Dives As Commodities Retreat On China Data - Canadian Commentary

Toronto stocks were lingering deep in the red Friday morning amid sell-offs in commodities after China reported slower economic growth in the first quarter of 2012. Also, profit taking after two days of smart gains weighed on trader sentiment.

The S&P/TSX Composite Index lost 144.04 points or 1.18 percent to 12,070.61, after gaining nearly 300 points or over 2 percent in the past two sessions.

The Diversified Materials Index lost nearly 3 percent, with First Quantum Minerals (FM.TO) surrendering close to 5 percent. Inmet Mining (IMN.TO) lost over 3 percent, while Teck Resources (TCK_B.TO) was easing just over 1 percent.

Crude oil prices are under pressure Friday morning after a slowdown in Chinese growth escalated worries concerning reduced demand form the commodity hungry nation. Light Sweet Crude Oil futures for May delivery are down modestly. Oil dipped closer to $100 early this week before staging a recovery. Crude for May delivery lost $0.56 to $103.08 a barrel.

In the oil patch, MEG Energy (MEG.TO) and Niko Resources (NKO.TO) lost around 3 percent each.

Parex Resources Inc. (PXT.TO) dived 22 percent after announcing the acquisition of Colombian focused private company for about $72 million and providing operational updates.

In the financial space, TD Bank (TD.TO), Scotiabank (BNS.TO) and National Bank (NA.TO) were down around 2 percent each.

Media and communications company Shaw Communications (SJR_B.TO) lost 4 percent despite reporting an improved second quarter profit of C$169 million or C$0.38 per share compared to C$163 million or C$0.37 per share in the previous year. Analysts were expecting the company to report earnings of C$0.38 per share.

Bio pharmaceutical company Lorus Therapeutics Inc. (LOR.TO) shed over 2 percent even after posting a narrower third quarter loss of C$1.0 million or C$0.05 per share compared to C$1.5 million or C$0.10 per share last year.

Executive search firm Caldwell Partners International (CWL.TO) slipped in to the red in second quarter, reporting net loss of C$241,287 or C$0.014 per share, compared to net income of C$147,676 or C$0.008 per share in the year-ago quarter. The stock shed 4 percent.

Meanwhile, gold stocks were marginally higher despite weak bullion prices. The price of gold moved down Friday morning, with gold for June down $11.50 to $1,669.10 an ounce.

Among gold stocks, Detour Gold (DGC.TO) and Eldorado Gold (ELD.TO) moved up close to 2 percent each.

Latin America focused gold miner Orosur Mining Inc. (OMI.V) gained over 4 percent even after posting lower third-quarter net income of $4.95 million versus $6.34 million a year ago.

Precious metals miner NovaGold Resources (NG.TO) edged down 0.30 percent after reporting first quarter net income of C$16.8 million, down from last year's C$20.8 million in the same period. On a per share basis, the company reported a loss of C$0.01 in the latest quarter, narrower than the loss of C$0.15 the previous year.

Meanwhile, health services company TearLab Corp. (TLB.TO) added over 2 percent. Wednesday, the company had announced that it has priced an underwritten public offering of 3 million shares of its common stock at a price to the public of $3.60 per share for gross proceeds of $10.8 million.

In economic news from the U.S., the Labor Department said the Consumer Price Index, a measure of inflationary pressures in the economy, increased 0.3 percent in March, slightly less than the 0.4 percent increase posted in February. The increase was in line with the expectations of most economists.

Separately, a report released by Reuters and the University of Michigan showed that the preliminary reading on consumer sentiment in the month of April fell to 75.7 compared to March's final reading of 76.2. Economists had expected the index to come in unchanged compared to the previous month.

From the euro zone, Germany's EU harmonized inflation slowed in March as initially estimated, final data from the Federal Statistical Office revealed. The harmonized index of consumer prices for Germany, which is calculated for European purposes, rose 2.3 percent annually, which was slightly slower than the 2.5 percent growth seen in February.

Elsewhere, the Chinese economy expanded at the weakest pace in nearly three years in the first quarter of 2012, with growth decelerating more than expected from the fourth quarter of 2011, mounting pressure on the government for continued policy action to support economic activity. The gross domestic product expanded 8.1 percent year-on-year in the first three months of 2012, slower than the fourth quarter's 8.9 percent increase, the National Bureau of Statistics said. The latest result was the weakest in 11 quarters. Economists expected a slowdown in growth to 8.4 percent.

by RTTNews Staff Writer

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