TSX Ends Higher On Global Economic Growth Prospects - Canadian Commentary

(RTTNews) - Canadian stocks ended higher Wednesday, tracking rising global equity markets, after the World Bank raised its growth outlook for the world economy with some upbeat manufacturing activity data from the U.S. The uptick was led mostly by resource and financial stocks, with gold stocks a dampener.

Asian and European stocks also settled higher on some upbeat global economic growth prospects, notwithstanding the continued uncertainty over the Federal Reserve moves over its stimulus program taper.

The World Bank on Wednesday raised its growth projections for the global economy indicating the easing of fiscal consolidation measures in high-income countries has boosted growth prospects. In its Global Economic Prospects report, the World Bank now expects the world economy to grow 3.2 percent this year, compared to the 3 percent expansion forecast last June. In 2015, the global gross domestic product is expected to grow 3.4 percent, slightly faster than 3.3 percent forecast earlier. The bank projects 3.5 percent expansion in 2016.

Some upbeat economic data from the U.S. also spurred the main Index with business activity for New York manufacturers expanding at a faster pace in January, with the index of regional activity rising much more than anticipated. Meanwhile, a Labor Department report showed producer prices in the U.S. rose in line with economists' estimates in December, with higher prices for energy and tobacco products offsetting a drop in food prices.

The S&P/TSX Composite Index closed Tuesday at 13,772.58, up 80.20 points or 0.59 percent. The index scaled an intraday high of 13,785.02 and a low of 13,692.38.

Crude oil ended higher after an official report from the Energy Information Administration showed crude stockpiles in the U.S. plunged much more than expected for a seventh straight week of decline.

The Energy Index gathered 0.39 percent, with U.S. crude oil futures for February delivery, the most actively traded contract, soaring $1.58 or 1.7 percent to close at $94.17 a barrel Wednesday on the Nymex.

Among energy stocks, Canadian Natural Resources Limited (CNQ.TO) slipped 0.19 percent, while Suncor Energy Inc. (SU.TO) edged up 0.30 percent. Talisman Energy Inc. (TLM.TO) gained 0.65 percent, while Encana Corp. (ECA.TO) added 0.53 percent. Pacific Rubiales Energy Corp. (PRE.TO) gained 0.79 percent.

The Information Technology Index added 1.48 percent, with smartphone maker BlackBerry Limited (BB.TO) gaining 2.86 percent.

The Diversified Metals & Mining Index surged 3.71 percent, with Teck Resources Limited (TCK.B.TO) soaring 3.92 percent and First Quantum Minerals Ltd. (FM.TO) surging 4.19percent. Lundin Mining Corp. (LUN.TO) gained 4.25 percent.

The Capped Materials Index jumped 1.72 percent, with fertilizer giant Potash Corp. of Saskatchewan Inc. (POT.TO) jumping 2.48 percent.

Gold futures settled lower on global cues with investors opting for the riskier equity assets after some upbeat, better than expected manufacturing activity data from the New York region.

The Global Gold Index shed 1.82 percent, with gold futures for February delivery, the most actively traded contract, dropping $7.10 or 0.6 percent to close at $1,238.30 an ounce Wednesday on the Nymex.

Among gold stocks, Kinross Gold Corp. (K.TO) gained 1.23 percent, while Barrick Gold Corp. (ABX.TO) added 1.49 percent. Yamana Gold Inc. (YRI.TO) shed 1.65 percent.

Goldcorp Inc. (G.TO) lost 0.25 percent, after Osisko Mining Corp.(OSK.TO) on Wednesday indicated Goldcorp's offer of C$2.6 billion as very low and price opportunistic. However, Osisko said it will continue to review Goldcorp's buyout Proposal and will communicate with its shareholders as appropriate. Osisko shares gained 0.32 percent.

The Financial Index gathered 0.56 percent with Bank of Montreal (BMO.TO) up 0.20 percent and Royal Bank of Canada (RY.TO) up 0.23 percent. The Bank of Nova Scotia (BNS.TO) moved up 0.08 percent, while Toronto-Dominion Bank (TD.TO) gathered 0.33 percent.

The Capped Industrials Index gained 1.10 percent, with Bombardier Inc. (BBD.A.TO, BBD.B.TO) adding 1.80 percent.

Canadian automotive supplier Magna International Inc. (MG.TO) Wednesday said for the full year 2014, total sales is anticipated between $33.8 billion and $35.5 billion. Seventeen analysts polled by Thomson Reuters currently expect revenues of $36.16 billion for the year. Nonetheless, the stock gained 1.06 percent.

In economic news, the New York Fed's general business conditions index jumped to 12.5 in January from 2.2 in December, with a positive reading indicating an increase in regional manufacturing activity. Economists expected the index at 3.5. The index rose to its highest level since reaching 15.9 in May 2012.

U.S. Producer price index rose 0.4 percent in December after edging down 0.1 percent in November. The increase was in line with estimates. The increase was partly due to a rebound in energy prices, which surged 1.6 percent in December after falling 0.4 percent in November and tumbling 1.5 percent in October.

Despite experiencing a deceleration, the German economy expanded for the fourth consecutive year, even as recession in some European countries together with slow global growth dampened the largest euro area nation's economic growth in 2013. Germany's gross domestic product grew 0.4 percent in 2013, slower than the 0.7 percent rise in 2012 and the 3.3 percent increase in 2011, data from the Federal Statistical Office showed Wednesday. The full-year estimate was below the 0.5 percent forecast by economists.

The World Bank has forecast the euro area to grow 1.1 percent this year, ending two years of recession. The U.S. economy is projected to grow 2.8 percent this year, compared to last year's 1.8 percent expansion. Thereafter, growth is seen firming to 2.9 and 3 percent in 2015 and 2016, respectively. The outlook was mostly unchanged from June.

China's GDP is projected to stay flat in 2014 at 7.7 percent, slowing to 7.5 percent for the next two years. The growth predictions are weaker than the 8 percent forecast for 2014 and 2015 each, in June. India's growth is projected to rise to 6.2 percent in financial year 2014-15, down from June's forecast of 6.5 percent for fiscal 2014-15. India's GDP is seen increasing to 6.6 percent in 2015-16 and to 7.1 percent in fiscal 2016-17, according to the latest forecasts.