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Commodities Drag TSX Lower - Canadian Commentary

Commodities Drag TSX Lower - Canadian Commentary
1/11/2013 11:03 AM ET

Snapping their three-session winning streak, Canadian stocks were lingering in the red Friday morning as commodities faltered after faster than expected inflation data from China raised demand concerns from the commodity hungry nation.

Meanwhile, Japan approved a fresh round of stimulus spending worth 10.3 trillion yen to jump-start the flagging economy. Prime Minister Shinzo Abe said the measures would include spending on public works, disaster prevention and financial aid for small firms. He said the new measures would add 2 percentage points to the gross domestic product and create about 600,000 jobs.

The S&P/TSX Composite Index lost 47.32 points or 0.38 percent to 12,552.42, after adding 100 points or nearly 1 percent in the past three straight sessions.

The price of gold was paring recent gains Friday morning as traders preferred to book profits amid a generally steady US dollar. Gold for February was down $17.80 to $1,660.20 an ounce.

Among gold stocks, Seabridge Gold (SEA.TO) lost about 3 percent. Barrick Gold (ABX.TO), , Goldcorp. (G.TO) and Agnico-Eagle Mines (AEM.TO) shed around 1 percent each. The price of crude oil was moving lower Friday morning after inflation data from China raised demand concerns from the commodity hungry nation. The consumer price index in China rose 2.5 percent year-on-year in December, the fastest pace since May. Economists expected the rate of inflation to increase to a more modest 2.3 percent. The freezing weather and the approaching 'Spring Festival' stoked prices of fresh food.

Crude for February shed $0.77 to $93.05 a barrel

In the oil patch, Niko Resources (NKO.TO) lost close to 3 percent, while Suncor Energy (SU.TO) was slipping about 1 percent.

Among base-metals stocks, Teck Resources (TCK_B.TO) lost about 3 percent.

Leucadia National Corp. (LUK) announced that it would intend to tender the common shares of Inmet Mining Corp.(IMN.TO) to the take-over bid that has been made by First Quantum Minerals (FM.TO). Leucadia said it own 11.04 million or approximately 15.92 percent of the outstanding common shares of Inmet

First Quantum Minerals (FM.TO) edged up 0.25 percent, while Inmet Mining (IMN.TO) eased about 0.50 percent.

Meanwhile, Absolute Software Corp. (ABT.TO) jumped 10 percent after announcing that it bagged a multi-million dollar deal in the healthcare industry.

In economic news, Statistics Canada said merchandise imports rose 2.7 percent in November, while exports decreased 0.9 percent. As a result, Canada's trade deficit with the world widened from $552 million in October to $2.0 billion in November. Economists were expecting $0.60 billion deficit.

From the U.S., the Commerce Department said that the trade deficit widened to $48.7 billion in November from a revised $42.1 billion in October. The wider deficit surprised economists, who had expected the deficit to narrow to $41.1 billion from the $42.2 billion deficit originally reported for the previous month.

From the euro zone, U.K. industrial production recovered in November, underpinned by robust mining output, the Office for National Statistics showed. Industrial output rose 0.3 percent month-on-month, reversing last month's 0.9 percent fall. Nonetheless, the rate of growth was smaller than the 0.8 percent rise forecast by economists.

Meanwhile, Switzerland's consumer prices slipped 0.4 percent year-on-year in December, the same rate of fall as seen in November, the Federal Statistical Office showed. Prices were forecast to ease 0.3 percent.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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