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TSX Settles Lower On Global Growth Concerns - Canadian Commentary

Canadian stocks ended lower for a second straight day Monday, tracking declining global markets as global economic growth concerns resurfaced, led mostly by resource stocks. Investor concerns worsened after the U.S. budget cuts kicked in last week with automatic spending cuts of roughly $85 billion, after President Barack Obama and Congress failed to strike a deal. The developments in the eurozone, with no political solution in Italy yet and China's efforts at cooling spiraling home prices also impacted sentiments.

Chinese stocks plunged 3.7 percent at the Shanghai Composite Index, driven mostly by property and construction sectors, with the government making efforts to contain spiraling home prices with new measures on property buying. The Shanghai Composite Index was at its lowest since August 2011.

The S&P/TSX Composite Index closed Monday at 12,707.41, down 65.71 points or 0.51 percent. The index touched an intraday high of 12,773.12 and a low of 12,705.02.

The Diversified Metals & Mining Index surrendered 2.72 percent, with Teck Resources Limited (TCK.B.TO) down 2.76 percent, Inmet Mining Corp. (IMN.TO) down 1.43 percent, Osisko Mining Corp. (OSK.TO) plunged 4.75 percent, and First Quantum Minerals Ltd. (FM.TO) plummeted 4.24 percent. Lundin Mining Corp.(LUN.TO) surrendered 1.08 percent.

The Energy Index dropped 1.23 percent, with U.S. crude oil futures for April delivery dropping $0.56 or 0.6 percent, to close at $90.12 a barrel Monday on the Nymex.

Among energy stocks, Suncor Energy (SU.TO) dropped 0.94 percent, Canadian Natural Resources Limited (CNQ.TO) was down 2.46 percent, and Husky Energy Inc. (HSE.TO) gathered 0.19 percent. Talisman Energy Inc.(TLM.TO) slipped 1.42 percent, while Encana Corp. (ECA.TO) shed 1.644 percent.

The Capped Materials Index plunged 2.56 percent, with Potash Corporation of Saskatchewan Inc.(POT.TO) down 1.01 percent.

The Global Gold Index plummeted 2.80 percent, although gold futures for April delivery edged down $0.10 to close at $1,572.40 an ounce an ounce Monday on the Nymex.

Among gold stocks, Goldcorp. Inc. (G.TO) shed 1.56 percent, Kinross Gold Corp. (K.TO) was down 2.03 percent, and Barrick Gold Corp. (ABX.TO) slipped 2.68 percent. Eldorado Gold Corp. (ELD.TO) slipped 4.20 percent.

Iamgold Corp. (IMG.TO) plunged 5.95 percent after indicating the initiation of a program to reduce annualized spending by $100 million to reinforce an already strong financial position and enhance its return on capital.

Gold miner Aurizon Mines Ltd. (ARZ.TO) gained 3.22 percent after announcing that it would be acquired by Hecla Mining Company (HL) for about C$796 million.

The Financial Index shed 0.17 percent, with Bank of Nova Scotia (BNS.TO) shedding 0.43 percent, Manulife Financial Corp. (MFC.TO) edging down 0.20 percent, and Bank of Montreal (BMO.TO) down 0.28 percent. Royal Bank (RY.TO) surrendered 0.24 percent, Canadian Imperial Bank Of Commerce (CM.TO) shed 0.02 percent, and Toronto-Dominion Bank (TD.TO) edged up 0.01 percent.

The Information Technology Index fell 1.13 percent, with BlackBerry Inc. (BB.TO) down 3.37 percent.

The Capped Industrials Index gained 0.53 percent with Bombardier Inc. (BBD.A.TO, BBD.B.TO) slipping 1.46 percent.

Mexico focused metals miner Scorpio Mining Corp. (SPM.TO), revealed the appointment of Thomas McGrail as Chief Operating Officer, effective March 1. The stock shed 4 percent

Packet microwave radio systems maker DragonWave Inc. (DWI.TO) dived 27.39 percent after revising down its fourth quarter revenue guidance to $30 million, while analysts currently expect revenue at $43.97 million for the quarter.

Power generation and infrastructure company Atlantic Power Corporation (ATP.TO) lost about 17 percent.

Independent power producer Capital Power Corp. (CPX.TO) shed 2.65 percent after reporting a much lower fourth-quarter net income of C$15 million or C$0.19 per share compared to C$84 million or C$1.39 per share in the year-ago quarter. Normalized earnings were C$16 million or C$0.23 per share, compared to C$20 million or C$0.36 per share last year. Analysts estimated earnings of C$0.37 per share for the quarter.

TransCanada Corp. (TRP.TO) rose 1.09 percent after a positive environmental report about its contentious Keystone XL pipeline project.

In economic news, eurozone producer price inflation slowed to 1.9 percent in January as expected by economists, Eurostat reported. The annual rate fell from 2.1 percent in the prior month. Month-on-month, producer prices were up 0.6 percent, reversing a 0.2 percent drop in December. Excluding energy prices, euro area producer price inflation fell to 1.4 percent from 1.6 percent.

Meanwhile, data released by the think-tank Sentix showed that eurozone investor confidence declined in March after improving for six months in a row. The index fell to -10.6 in March, the weakest since December 2012, from -3.9 in the prior month. The March figure was worse-than the expected level of -4.6 points.

The Markit/Chartered Institute of Purchasing & Supply Purchasing Managers' Index for U.K. dropped to 46.8 in February from 48.7 in January. Economists had forecast the index to rise to 49. Readings below 50 suggests contraction of the sector. The British construction activity declined at the sharpest pace since October 2009 on solid reduction in output and new works, the Markit Economics survey showed.

China's non-manufacturing sector growth eased to a five-month low in February, a report by the China Federation of Logistics and Purchasing said Sunday. The official Purchasing Managers' Index fell to 54.5 in February from 56.2 in January.

by RTT Staff Writer

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