TSX Ends Higher Amid U.S. Budget Crisis - Canadian Commentary

(RTTNews) - Canadian stocks snapped a two-day loss to settle higher Monday, led by gold stocks as commodity prices moved up even as the partial U.S. government shutdown entered a second week amid the looming debt ceiling deadline. Most global markets trended lower amid concerns a default would prove catastrophic if U.S. lawmakers fail to reach a compromise on raising the nation's debt limit before the October 17 deadline.

The federal government shutdown entered a second week, with Republicans and Democrats blaming each other for the deadlock on two key issues - funding to keep government agencies running and the need to raise the nation's debt ceiling before the October 17 deadline.

The S&P/TSX Composite Index closed Monday at 12,788.25, up 29.60 points or 0.23 percent. The index touched an intraday high of 12,814.68 and a low of 12,704.59.

The Diversified Metals & Mining Index shed 1.23 percent, with Teck Resources Limited (TCK.B.TO) slipping 1.90 percent and Lundin Mining Corp. (LUN.TO) down 2.42 percent. Osisko Mining Corp. (OSK.TO) surged 7.00 percent.

The Capped Materials Index gained 0.84 percent, with Potash Corporation of Saskatchewan Inc.(POT.TO) ending flat at $33.85.

Gold futures snapped a two-day straight loss to end higher Monday, on its safe haven appeal after the U.S. budget impasse entered a second week, with commodity prices moving up.

The Global Gold Index added 2.17 percent, with gold futures for December delivery gaining $15.20 or 1.2 percent to close at $1,325.10 an ounce Monday on the Nymex.

Yamana Gold Inc. (YRI.TO) gained 2.29 percent, while IAMGOLD Corp. (IMG) added 2.81 percent. Barrick Gold Corp. (ABX.TO) gained 1.35 percent, while Goldcorp Inc. (G.TO) moved up 1.24 percent. Kinross Gold Corp. (K.TO) gained 2.63 percent, while Eldorado Gold Corp. (ELD.TO) added 1.52 percent.

The Energy Index gained 0.04 percent, with U.S. crude oil futures for November delivery shedding $0.81 or 0.8 percent to close at $103.03 a barrel Monday on the Nymex.

Among energy stocks, Talisman Energy Inc. (TLM.TO) jumped 4.78 percent, and Suncor Energy Inc.(SU.TO) shed 0.30 percent. Enbridge Inc. (ENB.TO) added 0.74 percent, while Imperial Oil Limited (IMO.TO) shed 0.09 percent.

The Financial Index inched up 0.05 percent with Bank of Montreal (BMO.TO) up 0.10 percent and Manulife Financial Corp. (MFC.TO) down 0.41 percent. The Bank of Nova Scotia (BNS.TO) edged up 0.10 percent, while Toronto-Dominion Bank (TD.TO) gained 0.13 percent. Royal Bank of Canada (RY.TO) added 0.36 percent, while National Bank of Canada (NA.TO) surrendered 0.64 percent.

The Information Technology Index gathered 0.74 percent, with smartphone maker BlackBerry Limited (BB.TO) jumping 4.06 percent.

The Capped Industrials Index gained 0.52 percent, with Bombardier Inc. (BBD.A.TO, BBD.B.TO) slipping 0.42 percent and Air Canada (AC.B.TO) gaining 3.79 percent.

Base-metals miner Caledonia Mining Corp. (CAL.TO) gained 1.39 percent after reporting a 39 percent increase in its third quarter gold production at 12,042 ounce from its 49 percent-owned subsidiary, the Blanket Mine in Zimbabwe. Total gold production for the nine months to September 30, 2013 was 34,103 ounce, a 1.4 percent from last year's 33,643 ounce.

In economic news Statistics Canada said municipalities issued building permits worth $6.3 billion in August, down 21.2 percent from July, mainly due to lower construction intentions in both non-residential and residential sectors. This decline followed a 21.4 percent increase the previous month and the trend in the value of building permits has become relatively flat since January 2013.

Elsewhere, eurozone investor confidence deteriorated unexpectedly in October, a closely watched survey conducted by think-tank Sentix showed . The headline investor sentiment index dropped to 6.1 in October from the second-highest level on record. Economists forecast the score to rise to 8.5 from 6.5 points in September. The unexpected decline was driven by the deterioration in respondents future expectations.

World Bank on Monday lowered its growth projections for developing East Asia, citing slowing growth in China and other economies in the region. The lender has now forecast 7.1 percent growth for the region in 2013, less than the 7.8 percent growth it predicted in April. Growth in 2014 is seen at 7.2 percent. The World Bank expects the Chinese economy to expand 7.5 percent this year and 7.7 percent in 2014.

Elsewhere, the Bank of Japan expects industrial production to continue increasing moderately in the coming months, a monthly report from the central bank showed on Monday. Both public and housing investments are expected to continue trending upward, while business fixed investment is seen expanding at a moderate pace as corporate profits continue to improve. The bank reiterated private consumption to likely remain resilient, supported by improvement in the employment and income situation.