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TSX Settles Modestly Lower On Eurozone Concerns - Canadian Commentary

Canadian stocks closed in the red for a fourth straight day Monday, paring most of the losses in a late rally. Investors weighed the changed political scenario in Europe with new governments due to take charge in France and Greece. In Germany too, Angela Merkel faced a challenge with her ruling coalition having reportedly lost an election on Sunday.

The newly elected governing entities in both France and Greece have indicated their aversion to the strict austerity measures touted for much of eurozone as the means to overcome the delicate sovereign debt crisis. The election outcome in France and Greece roiled global markets, which investors see as a definite setback to the progress thus far achieved in the ongoing eurozone crisis and economic recovery. Nevertheless, most European markets rebounded to close higher.

Toronto's main index, the S&P/TSX, closed Monday at 11,860.66, down 10.57 points or 0.09 percent. The S&P/TSX Composite Index touched an intraday high of 11,879.02 and a low of 11,785.74.

The TSX Venture Index closed at 1,397.42, down 7.63 points or 0.54 percent. The index opened at 1,422.56 compared to its previous close of 1,405.05.

Most major indices of the S&P/TSX Index were in negative territory, led by the Diversified Metals & Mining Index that plunged close to 3 percent. Among major gainers were the Financial, Utilities, and Telecommunications indices.

The Diversified Materials Index dived 2.87 percent, with First Quantum Minerals Ltd. (FM.TO) shedding 3.67 percent, while Inmet Mining Corp. (IMN.TO) surrendered almost 8 percent. Teck Resources (TCK_B.TO) dropped 1.29 percent, while Lundin Mining Corp. (LUN.TO) moved up 1.54 percent.

The Financial Index moved up 0.42 percent, with Toronto-Dominion Bank (TD.TO) up 0.60 percent, Royal Bank of Canada (RY.TO) shed 0.09 percent, and Bank of Nova Scotia (BNS.TO) was up 1.53 percent.. Manulife Financial Corp. (MFC.TO) gave up 0.16 percent.

Transportation systems maker Bombardier (BBD.B.TO) shed 0.25 percent, while Blackberry maker Research In Motion Limited (RIM) dropped 1.76 percent.

Crude oil prices for June delivery dropped $0.55 or 0.6 percent to close at $97.94 a barrel on the NYMEX Monday.

The Energy Index shed 0.26 percent, with Talisman Energy Inc. (TLS.TO) dropping 0.52 percent, while Suncor Energy (SU.TO) edged up 0.10 percent. Canadian Natural Resources Limited (CNQ.TO) was down 0.22 percent., while Cenovus Energy Inc. (CVE) edged up 0.09 percent.

Egypt focused oil and gas company TransGlobe Energy (TGL.TO) dived over 7 percent despite posting a much improved first-quarter earnings of $10.98 million or $0.15 per share as compared to $2.89 million or $0.04 per share a year ago.

Oil and gas company NuVista Energy (NVA.TO) dropped 3.44 percent after reporting a first quarter loss of $3 million or $0.03 per share, compared to net income of $9.6 million or $0.10 per share last year. Adjusted loss widened to $10.9 million or $0.11 per share, while analysts expected a loss of $0.09 per share for the quarter.

The price of gold was moving lower Monday morning as traders were concerned over the eurozone debt situation after elections in France. Gold prices dropped $6.10 or 0.4 percent to close at $1,639.10 an ounce Thursday on the NYMEX, with the dollar trading strong against most major currencies. The Global Gold Index declined 1.32 percent.

Among gold stocks, Eldorado Gold Corporation (ELD.TO) fell 3.12 percent, while Barrick Gold Corp. (ABX.TO) edged down 0.05 percent. B2Gold Corp. (BTO.TO) plunged 6.76 percent, while Torex Gold Resources Inc. (TXG.TO) shed 4.68 percent. Kinross Gold Corp. (K.TO) dropped 0.96 percent. Allied Nevada Gold (ANV.TO) plunged over 11 percent.

The Materials Index fell 1.56 percent with Mercator Minerals Ltd. (ML.TO) plummeting 10.78 percent, while Uranium One Inc. (UUU.TO) surrendered 2.42 percent. Potash Corporation of Saskatchewan Inc. (POT.TO) edged down 1.02 percent.

Real estate company Gazit America Inc. (GAA.TO) gained almost 32 percent after receiving a non-binding preliminary proposal from supermarket operator Gazit-Globe Ltd. (GZT) and First Capital Realty Inc. (FCR.TO) to acquire it for C$7.07 per share.

In economic news from the U.S., a Federal Reserve report on Monday showed a much bigger than expected increase in U.S. consumer credit in March. The report showed consumer credit jumped by $21.4 billion in March following a revised $9.3 billion increase in February. Economists expected consumer credit to increase by about $9.8 billion. The much bigger than expected increase in consumer credit in March reflects the biggest increase since November 2001.

Statistics Canada said contractors took out building permits worth C$6.83 billion in March, up 4.7 percent from February following an upwardly revised 7.6 percent increase the previous month. With the two months of gains, building permits are just below an all-time high set in March 2011.

Elsewhere, German factory orders increased 2.2 percent in March from the previous month on robust foreign demand, the Federal Ministry of Economy and Technology said. March's monthly growth was bigger than the expected 0.5 percent and far exceeded the 0.6 percent rise logged in February.

Meanwhile, Switzerland's consumer prices declined for the seventh consecutive month in April, data released by the Federal Statistical Office revealed. The consumer price index dropped 1 percent, following a similar size fall in March. Economists had expected a 0.9 percent decline.

by RTT Staff Writer

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