Canadian Stocks Have Slipped Into The Red -- Canadian Commentary

(RTTNews) - The Canadian stock market was up in early trade Thursday, after investors were pleasantly surprised by the extensive stimulus measures announced by the European Central Bank. However, those early gains have eroded and the market has slipped into negative territory. Gold and mining stocks are among the best performers this morning, while energy stocks are lagging behind due to a dip in crude oil prices.

Markets in Europe are mostly higher Thursday after the European Central Bank delivered more than what markets hoped by cutting its benchmark interest rate to zero and expanding its asset purchases, among other steps.

The bank also announced a new round of longer-term financing operations and decided to include non-bank debt in its list of eligible assets for purchases.

In its policy session in Frankfurt on Thursday, the 25-member Governing Council lowered its benchmark interest rate, the main refinancing rate, by five basis points to a record low zero percent. Economists had expected the rate to be left unchanged.

The already-negative deposit rate was cut by 10 basis points to -0.40 percent. The decision was in line with economists' expectations.

The marginal lending facility rate was reduced by five basis points to 0.25 percent. Economists had expected the rate to be held steady.

Further, the bank expanded the monthly purchases under the asset purchase programme by EUR 20 billion to EUR 80 billion starting in April. Economists were looking for an increase of at least EUR 10 billion.

Markets in the United States are up in early trade Thursday, but are off their early highs. Investors reacted positively to the ECB stimulus package, but a dip in crude oil prices is limiting the upside.

After reporting modest increases in first-time claims for U.S. unemployment benefits in the two previous weeks, the Labor Department released a report on Thursday showing that initial jobless claims pulled back by much more than expected in the week ended March 5th.

The Labor Department said initial jobless claims dropped to 259,000, a decrease of 18,000 from the previous week's revised level of 277,000. Economists had expected jobless claims to edge down to 272,000 from the 278,000 originally reported for the previous week.

The benchmark S&P/TSX Composite Index is down 8.83 points or 0.07 percent at 13,384.07.

On Wednesday, the index closed up 81.85 points or 0.61 percent, at 13,392.90. The index scaled an intraday high of 13,435.94 and a low of 13,342.74.

The Gold Index is up 2.95 percent. Gold prices have reversed early losses and are now gaining ground.

Barrick Gold (ABX.TO) is rising 3.42 percent and IAMGOLD (IMG.TO) is advancing 5.36 percent. Yamana Gold (YRI.TO) is up 1.22 percent and Kinross Gold (K.TO) is gaining 2.89 percent. Goldcorp (G.TO) is climbing 3.16 percent and Royal Gold (RGL.TO) is adding 2.20 percent. Eldorado Gold (ELD.TO) is higher by 2.67 percent and B2Gold (BTO.TO) is increasing 5.75 percent.

The Capped Materials Index is also up 1.95 percent. Agnico Eagle Mines (AEM.TO) is advancing 4.18 percent and Franco-Nevada (FNV.TO) is adding 3.41 percent. Silver Wheaton (SLW.TO) is higher by 1.92 percent and Agrium (AGU.TO) is rising 0.19 percent.

The Diversified Metal and Mining Index is climbing 2.15 percent. HudBay Minerals (HBM.TO) is climbing 1.93 percent and Capstone Mining (CS.TO) is higher by 5.66 percent.

First Quantum Minerals (FM.TO) is surging 11.98 percent. The company will sell its Kevitsa nickel-copper-platinum mine in Finland for $712 million.

The heavyweight Financial Index is rising 0.30 percent. Bank of Montreal (BMO.TO) is up 0.70 percent and Royal Bank of Canada (RY.TO) is rising 0.40 percent. National Bank of Canada (NA.TO) is higher by 0.15 percent and Bank of Nova Scotia (BNS.TO) is adding 0.29 percent. Toronto-Dominion (TD.TO) is increasing 0.02 percent and Canadian Imperial Bank of Commerce (CM.TO) is climbing 0.50 percent.

The Capped Information Technology Index is lower by 1.10 percent. Constellation Software (CSU.TO) is down 0.27 percent and Avigilon (AVO.TO) is falling 1.21 percent. Sierra Wireless (SW.TO) is declining 1.32 percent and BlackBerry (BB.TO) is losing 3.12 percent.

The Capped Industrials Index is losing 0.68 percent. Finning International (FTT.TO) is falling 1.13 percent and Air Canada (AC.TO) is down 2.42 percent. Canadian Pacific Railway (CP.TO) is decreasing 1.12 percent and Canadian National Railway (CNR.TO) is surrendering 0.91 percent.

The Energy Index is declining 0.76 percent. Crude oil prices are easing back from their highest level since early December.

Cenovus Energy (CVE.TO) is falling 0.53 percent and Husky Energy (HSE.TO) is surrendering 1.04 percent. Encana (ECA.TO) is weakening by 2.35 percent and Suncor Energy (SU.TO) is down 1.54 percent. Canadian Oil Sands (COS.TO) is lower by 1.35 percent and Crescent Point Energy (CPG.TO) is down 0.46 percent. Imperial Oil (IMO.TO) is decreasing 0.34 percent and Pacific Exploration & Production (PRE.TO) is sinking 10.34 percent.

The Capped Health Care Index is down 1.09 percent. Extendicare (EXE.TO) is falling 0.42 percent and Valeant Pharmaceuticals International (VRX.TO) is losing 1.08 percent.

The Capped Telecommunication Services Index is falling 0.68 percent. TELUS (T.TO) is losing 0.10 percent and Manitoba Telecom Services (MBT.TO) is weakening by 1.16 percent. BCE (BCE.TO) is also down 0.27 percent.

Magna International (MG.TO) is opening a new seat-making facility in China. The stock is now down 1.61 percent.

Premium Brands (PBH.TO) is climbing 4.04 percent. The company reported fourth quarter earnings from continuing operations of $0.53 per share, compared to $0.06 per share last year.

Lumenpulse (LMN.TO) is rising 6.04 percent after it agreed to acquire Fluxwerx Illumination Inc. for a total initial consideration of $60 million.

The company also reported third quarter EPS of C$0.06, which was unchanged from the prior year result.

On the economic front, China's inflation accelerated at the fastest pace since July 2014 reflecting a surge in food prices amid Lunar New Year holidays. Consumer prices increased at a faster pace of 2.3 percent year-on-year in February following a 1.8 percent rise in January, the National Bureau of Statistics said Thursday.

Inflation rose to the fastest since July 2014, while it was forecast to remain unchanged at 1.8 percent. Still inflation remains below the full-year target of 3 percent.

Germany's exports dropped unexpectedly at the start of the year suggesting that weak demand from emerging economies, especially China, weighed on foreign demand, while imports growth exceeded expectations.

Exports fell 0.5 percent month-on-month in January, following a 0.7 percent drop in December, Destatis reported Thursday.

This was the second consecutive decrease in shipments. Economists had forecast exports to recover in January by expanding 0.8 percent.

Meanwhile, imports grew 1.2 percent from December, when it fell 1.6 percent. The pace of growth was faster than an expected 0.8 percent.

As a result, the trade surplus decreased to a seasonally adjusted EUR 18.8 billion from EUR 20.3 billion in the previous month.

French industrial production recovered at a faster than expected pace in January, the statistical office Insee reported Thursday. Industrial output grew 1.3 percent month-on-month, reversing a 0.6 percent fall in December. Economists had forecast a 0.8 percent increase. This was the fastest growth in five months.

French payroll employment increased notably in the fourth quarter, the statistical office Insee said Thursday. Employment in non-farm sectors rose 31,800 compared to an increase of 12,900 in the third quarter. Excluding temporary work, employment increased slightly by 12,900.

The U.K. grew at a slightly slower pace in the three months to February, the National Institute of Economic and Social Research said Wednesday. Output climbed 0.3 percent in the three months ended February after logging a growth of 0.4 percent in the three months to January period.

The monthly house price balance in the United Kingdom climbed to 50 percent in February, the Royal Institution of Chartered Surveyors said on Thursday. That was in line with expectations, and it was up from the downwardly revised 48 percent in January.

In commodities, crude oil futures for April delivery are down 0.52 or 1.36 percent at $37.77 a barrel.

Natural gas for April is up 0.028 or 1.60 percent at $1.78 per million btu.

Gold futures for April are up $10.10 or 0.80 percent at $1,267.50 an ounce.

Silver for May is up $0.229 or 1.49 percent at $15.595 an ounce.