TSX Ends Higher On Commodities - Canadian Commentary

(RTTNews) - Canadian stocks ended higher for a third straight session on Tuesday, as commodity prices turned higher with investors cheering some upbeat economic data out of the U.S. and China. Nonetheless, concerns over the U.S. Federal Reserve tapering its quantitative easing program continued to weigh on investor sentiment.

Elsewhere, most global equity markets declined with investors focused on the upcoming U.S. Federal Reserve policy meet with comments from some Fed members fueling fears the central bank could begin tapering its $85-billion monthly asset purchase program next week.

Federal Reserve Bank of Dallas President Richard Fisher said in Chicago on Monday that the Fed needs to begin tapering at the earliest opportunity and cease from interfering with the normal price-setting functioning of financial markets.

In some upbeat data from the U.S., wholesale inventories rose much more than expected in October, due mainly to a notable growth in inventories of non-durable goods. The market also took stock of Friday's upbeat jobs data in November that showed unemployment rate in the U.S. down at a five-year low of 7 percent.

Meanwhile, Chinese retail sales growth accelerated in November to the strongest pace so far this year, while industrial production and fixed asset investments trailed forecasts, latest figures from the National Bureau of Statistics revealed, sending mixed signals on the prospects of the economy.

The S&P/TSX Composite Index closed Tuesday at 13,324.01, up 11.23 points or 0.08 percent. The index scaled an intraday high of 13,360.82 and a low of 13,312.76.

Crude oil ended sharply higher Tuesday, after some recent upbeat economic data lifted investor sentiments with anticipation that crude oil stockpiles in the U.S. would likely drop for a second straight week, easing concerns of a glut in supplies.

The Energy Index gained 0.29 percent, with U.S. crude oil futures for January delivery, the most actively traded contract, jumping $1.17 or 1.2 percent to close at $98.51 a barrel Tuesday on the Nymex.

Among energy stocks, Canadian Natural Resources Limited (CNQ.TO) gained 1.10 percent and Encana Corp. (ECA.TO) dropped 0.73 percent.

Talisman Energy Inc. (TLM.TO) added 1.13 percent after announcing that two of its affiliates would divest about 12 percent equity interest in the Ocensa Pipeline in Colombia to an investment group led by Advent International for a total cash consideration of about $595 million.

The Information Technology Index added 1.87 percent, with smartphone maker BlackBerry Limited (BB.TO) gaining 3.44 percent.

The Diversified Metals & Mining Index shed 0.86 percent, with First Quantum Minerals Ltd. (FM.TO) diving 3.36 percent and Lundin Mining Corp. (LUN.TO) shedding 0.72 percent. However, Teck Resources (TCK.B.TO) gained 1.35 percent..

The Capped Materials Index gained 1.77 percent, although Potash Corporation of Saskatchewan Inc.(POT.TO) shed 1.02 percent.

Gold futures surged to end at a three-week high Tuesday, as investors opted for the safe haven status of the precious metal while tracking declining global equity markets.

The Global Gold Index jumped 3.90 percent, with gold futures for February delivery, the most actively traded contract, surging $26.90 or 2.2 percent to close at $1,261.10 an ounce Tuesday on the Nymex.

Among gold stocks, Kinross Gold Corp. (K.TO) surged 5.35 percent, while Barrick Gold Corp. (ABX.TO) soared 5.29 percent. Yamana Gold Inc. (YRI.TO) added 2.14 percent, while IAMGOLD Corp. (IMG.TO) jumped 4.10 percent.

The Financial Index slipped 0.46 percent with Bank of Montreal (BMO.TO) dropping 0.61 percent, while Royal Bank of Canada (RY.TO) surrendered 0.57 percent. The Bank of Nova Scotia (BNS.TO) dipped 0.64 percent, while Toronto-Dominion Bank (TD.TO) eased 0.38 percent.

The Capped Industrials Index dropped 0.21 percent, with Bombardier Inc. (BBD.A.TO, BBD.B.TO) down 0.64 percent.

Grain handler Vitran Corp. Inc. (VTN.TO) surged 12.18 percent after indicating it would be acquired by 2398946 Ontario Inc., an affiliate of Manitoulin Transport Inc. for $6.00 per share in cash.

In economic news from the U.S., the Commerce Department said wholesale inventories jumped by 1.4 percent in October following an upwardly revised 0.5 percent increase in September. Economists had been expecting inventories to increase by about 0.4 percent, matching the growth originally reported for the previous month. Further, the Commerce Department said wholesales sales also increased by 1.0 percent in October after rising by an upwardly revised 0.8 percent in September.

China's retail sales grew 13.7 percent year-on-year in November following a 13.3 percent gain in October. This is the strongest growth since December last year, even as economists had forecast a marginal slowdown to 13.2 percent.

Growth in Chinese industrial production eased more than expected to a four-month low, with production growing 10 percent annually in November, decelerating from 10.3 percent growth in October. Economists forecast a marginally better 10.1 percent increase.

From Europe, U.K.'s industrial as well as manufacturing output growth slowed in October as expected by economists, the Office for National Statistics showed. Both industrial and manufacturing output grew 0.4 percent each. The rates matched economists' expectations. Overall industrial production increased 0.9 percent in September and manufacturing by 1.2 percent.

Meanwhile, the U.K. visible trade gap narrowed to GBP 9.7 billion in October from GBP 10.1 billion in September, the Office for National Statistics revealed. The visible trade deficit with EU countries widened to GBP 6.5 billion from GBP 6.2 billion in September. Meanwhile, the shortfall with non-EU nations narrowed to GBP 3.3 billion from GBP 3.9 billion.