TSX Ends Higher On Global Cues -- Canadian Commentary

(RTTNews) - Canadian stocks snapped a two-day loss to end higher on Thursday, tracking rising global equity markets after the U.S. Federal Reserve maintained its current interest rates in the country, while indicating it would remain patient in increasing rates.

The Fed maintained its benchmark interest rate unchanged near zero, while not providing any specific guidance regarding its first rate hike. But the central bank's forecast reinforced the view that the eventual increase in rates will be gradual. The Fed also indicated the improving U.S. economic growth would likely see one or two rate hikes during the year.

Nevertheless, the gains were capped on concerns over developments in Europe, after a meeting of eurozone finance ministers to discuss Greece ended in a stalemate without any agreement over Athens' financial obligations toward its international creditors.

Meanwhile, the European Council President Donald Tusk has since called an emergency summit meeting of eurozone leaders on Monday to discuss the Greek crisis. It appears very likely that Greece default in its repayment deadline of June 30, when the bailout agreement expires. Greece is bound to pay about $1.7 billion to the International Monetary Fund by that date.

Though the Canadian market got off to a weak start Thursday morning, it has recovered much of the losses with gains in gold, healthcare and industrial stocks, somewhat offset by losses in energy and financial stocks.

European markets also recovered from weakness in early trade to end on positive territory, although concerns over Greece continue to weigh on investor sentiments. Retail sales in the U.K. also logged an unexpected increase.

Markets in the United States ended in the green Thursday, reacting positively to yesterday's Fed statement and some upbeat data showing first time claims for unemployment benefits in the U.S. dropped more than expected.

Nonetheless, a Commerce Department report showed overall consumer prices in the U.S. to have risen slightly less than expected in May, while indicating a substantial increase in energy prices.

The benchmark S&P/TSX Composite Index closed Thursday at 14,770.64, up 37.66 points or 0.26 percent. The index scaled an intraday high of 14,781.45 and a low of 14,685.15.

On Wednesday, the index closed down 20.12 points or 0.14 percent, at 14,732.93. The index scaled an intraday high of 14,825.13 and a low of 14,659.89.

Crude oil futures climbed to end higher as the dollar weakened after the Federal Reserve's view on providing any specific time for raising interest rates. The uptick comes despite the EIA data that showed crude oil stocks at the Cushing, Oklahoma hub to have risen for the first time since April.

A weekly report from the EIA on Wednesday showed U.S. crude oil inventories dropped 2.7 million barrels in the week ended June 12, while analysts expected stocks to decline 2.4 million barrels. Stocks at Cushing, Oklahoma, the key delivery point for Nymex crude, rose 112,000 barrels last week, while it was estimated to drop 850,000 barrels.

The Energy Index fell 0.53 percent, although U.S. crude oil futures for July delivery, the most actively traded contract, gained $0.53 or 0.9 percent, to settle at $60.45 a barrel on the New York Mercantile Exchange Thursday.

Among energy stocks, Suncor Energy Inc. (SU.TO) dropped 1.33 percent, while Crescent Point Energy Corp. (CPG.TO) gained 0.40 percent. Encana Corp. (ECA.TO) dropped 2.70 percent, and Enbridge Inc. (ENB.TO) inched up 0.05 percent.

Gold futures ended at a near one-month high as the dollar weakened after a dovish U.S. Federal Reserve stand following its monetary policy meet yesterday, signaling it would be patient in raising interest rates.

The Gold Index gained 1.15 percent, with gold for August delivery surging $25.20 or 2.1 percent to settle at $1,202.00 an ounce in electronic trade on the New York Mercantile Exchange Wednesday.

Among gold stocks, Goldcorp Inc. (G.TO) gained 1.82 percent, Barrick Gold Corp. (ABX.TO) moved up 1.27 percent, and Kinross Gold Corp. (K.TO) jumped 4.58 percent. IAMGOLD Corp. (IMG.TO) gathered 0.69 percent, while Eldorado Gold Corp. (ELD.TO) added 0.19 percent.

The Capped Materials Index added 0.78 percent, as Agrium Inc. (AGU.TO) gained 0.50 percent and Agnico Eagle Mines Limited (AEM.TO) jumped 3.25 percent. Franco-Nevada Corp. (FNV.TO) gathered 0.48 percent, while Potash Corp. of Saskatchewan Inc. (POT.TO) moved up 0.16 percent.

The Diversified Metals & Mining Index inched up 0.10 percent, as First Quantum Minerals Ltd. (FM.TO) fell 0.46 percent, Sherritt International (S.TO) shed 0.90 percent, and and Teck Resources (TCK.B.TO) gained 0.15 percent.

The heavyweight Financial Index fell 0.14 percent, as Royal Bank of Canada (RY.TO) dipped 0.26 percent, National Bank of Canada (NA.TO) surrendered 1.30 percent, and Bank of Montreal (BMO.TO) dropped 0.13 percent.

Bank of Nova Scotia (BNS.TO) slipped 0.17 percent, while Toronto-Dominion Bank (TD.TO) fell 0.41 percent. Canadian Imperial Bank of Commerce (CM.TO) dropped 0.20 percent.

The Capped Health Care Index jumped 1.95 percent as Valeant Pharmaceuticals International, Inc. (VRX.TO) added 1.54 percent, Extendicare Inc. (EXE.TO) gained 3.72 percent, and Concordia Healthcare Corp. (CXR.TO) gathered 4.96 percent.

The Capped Industrials Index advanced 0.75 percent, as Bombardier Inc. (BBD-A.TO) gained 2.92 percent after its Commercial Aircraft unit signed a five-year heavy maintenance agreement with Mesa Air Group.

Finning International Inc. (FTT.TO) shed 0.30 percent, while Canadian Pacific Railway (CP.TO) gained 0.84 percent and Canadian National Railway (CNR.TO) added 1.31 percent.

The Information Technology Index slipped 0.63 percent, as Sierra Wireless, Inc. (SW.TO) added 0.44 percent and Descartes Systems Group Inc. (DSG.TO) fell 0.45 percent. BlackBerry Inc. (BB.TO) shed 2.28 percent.

The Capped Telecommunication Index gathered 0.54 percent, as TELUS Corp. (T.TO) moved up 1.15 percent, Rogers Communications Inc. (RCI.B.TO) gained 0.10 percent and BCE Inc. (BCE.TO) added 0.11 percent.

Colliers International Group Inc. (CIG.TO) fell 1.23 percent, after the indicated the appointment of Jay Hennick as its chairman and chief executive officer, and Dylan Taylor as president and chief operating officer, following the resignation of CEO Douglas Frye.

Lumenpulse Inc. (LMP.TO) added 0.56 percent after reporting a fourth quarter adjusted profit of C$0.03 per share, compared to a loss of C$0.10 per share last year.

Regal Lifestyle Communities Inc. (RLC.TO) soared 27.75 percent after agreeing to be acquired by Revera and Health Care REIT for C$12.00 per share in cash.

On the economic front, a Labor Department report on Thursday showed a bigger than expected drop in first-time claims for U.S. unemployment benefits in the week ended June 13, in yet another upbeat sign for the U.S. labor market. The initial jobless claims fell to 267,000, a decline of 12,000 from the previous week's unrevised level of 279,000. Economists expected jobless claims to dip to 275,000.

Meanwhile, a Commerce Department report on Thursday showed consumer prices in the U.S. rose slightly less than economists had expected in May, notwithstanding a substantial increase in energy prices. The consumer price index climbed 0.4 percent in May after inching up by 0.1 percent in April, reflecting the largest monthly gain since February of 2013. However, it was still smaller than the 0.5 percent increase expected by economists.

Manufacturing conditions in the Philadelphia region have improved in June, according to a report released by the Federal Reserve Bank of Philadelphia on Thursday. The Philly Fed said its diffusion index of current activity jumped to 15.2 in June from 6.7 in May, with a positive reading indicating growth in regional manufacturing activity. Economists expected the index to inch up to 8.0.

Eurozone's labor costs rose sharply in the first quarter at the fastest pace in more than three years, data from Eurostat revealed Thursday. Hourly labor costs grew 2.2 percent annually in the three months to January, following a 1.2 percent increase in the previous quarter. It was the fastest rate of growth since the second quarter of 2011 when costs rose 2.5 percent.

U.K. retail sales increased unexpectedly in May as low inflation and strong pay growth underpinned consumer spending. Retail sales including auto fuel rose 0.2 percent in May from April when it climbed 0.9 percent, data from the Office for National Statistics showed Thursday. Although the monthly growth eased from April, this was the second consecutive rise and came in contrast to a 0.1 percent fall forecast by economists.