TSX Ends Higher On Rate Decision, China -- Canadian Commentary

(RTTNews) - Canadian stocks rebounded to end sharply higher on Wednesday, as investors reacted positively to Bank of Canada's rate decision and some upbeat Chinese data with its gross domestic product rising more than expected in the second quarter.

The Bank of Canada this morning decided to keep its interest rate at 1 percent, unchanged for nearly four years now. The central bank said the economy needs stimulative policy for longer than previously expected to stay on track for sustained recovery.

Meanwhile, testifying before the House Financial Services Committee, U.S. Federal Reserve Chair Janet Yellen said the ailing job market and stagnant wages justify loose monetary policy for the foreseeable future. On Tuesday, Yellen had indicated that a rate hike could happen sooner than anticipated if the jobs market continues to show improvement.

The Federal Reserve's Beige Book report showed economic activity improved along with the labor market across the United States. The Beige Book, a collection of anecdotal data on the condition of the U.S. economy, showed all twelve of the U.S. Fed districts recorded growth since June. Only two districts, Boston and Richmond, reported a slightly slower pace of growth during that time.

Diversified metals and energy stocks led Canadian stocks up north. Financial stocks also rose on easing concerns that an ailing Portuguese lender could upset the European banking system.

The S&P/TSX Composite Index closed Wednesday at 15,226.34, up 145.02 points or 0.96 percent. The index scaled an intraday high of 15,240.84 and a low of 15,081.32.

On Tuesday, the index closed down sharply lower after U.S. Federal Reserve Chair Janet Yellen's testimony before the Senate Banking Committee, indicating possibilities of a sooner-than-later rate hike.

Crude oil moved up sharply to end higher amid expectations of increased demand prospects after some upbeat Chinese GDP data, and with the official crude stockpiles dropping significantly more than expected last week.

A report from the U.S. Energy Information Administration this morning, showed U.S. crude oil inventories to have declined by a more than expected 7.5 million barrels in the week ended July 11.

The Energy Index jumped 1.37 percent, with U.S. crude oil futures for August delivery, the most actively traded contract, gaining $1.24 or 1.2 percent to close at $101.20 a barrel Wednesday on the Nymex.

Among energy stocks, Canadian Natural Resources Ltd. (CNQ.TO) up 1.54 percent, Talisman Energy Inc. (TLM.TO) added 1.41 percent, Suncor Energy Inc.(SU.TO) gained 1.20 percent, Canacol Energy Ltd. (CNE.TO)jumped 6.32 percent, Cenovus Energy Inc. (CVE.TO) was up 0.87 percent, Encana Corp. (ECA.TO) moved up 2.39 percent, and Pacific Rubiales Energy Corp. (PRE.TO) jumping 4.05 percent

The Financial Index gained 0.68 percent with Toronto-Dominion Bank adding 0.49 percent, National Bank of Canada (NA.TO) up 0.49 percent, Bank of Nova Scotia (BNS.TO) up 0.63 percent, Royal Bank of Canada (RY.TO) gained 0.64 percent, Bank of Montreal (BMO.TO) up 0.83 percent, and Canadian Imperial Bank Of Commerce (CM.TO) up 0.34 percent.

The Capped Healthcare Index added 0.95 percent with Catamaran Corp. (CCT.TO) up 0.91 percent, and Valeant Pharmaceuticals International, Inc. (VRX.TO) adding 1.57 percent.

Gold futures ended higher on some upbeat economic data from China with the country's gross domestic product rising more than expected in the second quarter and U.S. producer price inflation rising more than expected.

Global Gold Index added 1.71 percent, with gold futures for August delivery gaining $2.70 or 0.2 percent to close at $1,299.60 an ounce Wednesday on the Nymex.

Among gold stocks, Yamana Gold Inc. (YRI.TO) gained 2.43 percent, Kinross Gold Corp. (K.TO) added 1.58 percent, Eldorado Gold Corp. (ELD.TO) up 1.30 percent, and Goldcorp Inc. (G.TO) was up 1.38 percent. Barrick Gold Corp. (ABX.TO) added 2.89 percent.

The Capped Materials Index gained 1.25 percent, with Potash Corp. of Saskatchewan Inc. (POT.TO) edging up 0.05 percent.

The Diversified Metals & Mining Index gathered 1.16 percent, with Lundin Mining Corp. (LUN.TO) up 0.48 percent, Teck Resources Limited (TCK.B.TO) up 2.09 percent, and First Quantum Minerals Ltd. (FM.TO) adding 0.96 percent.

The Information Technology Index dived 2.12 percent as BlackBerry Limited (BB.TO) plummeting 11.70 percent, following IBM's planned deal with Apple Inc to sell iPhones and iPads loaded with applications geared to business users.

CGI Group Inc. (GIB.A.TO) up 0.16 percent, Constellation Software Inc. (CSU.TO) edging up 0.02 percent, and Avigilon Corp. (AVO.TO) down 0.34 percent.

The Capped Industrials Index moved up 0.60 percent, with Bombardier Inc. (BBD.B.TO) down 1.06 percent, notwithstanding its unit, Bombardier Aerospace signing a Letter of Intent with one of its existing African airline customers for five CSeries jets for about $365 million.

The Capped Telecommunications Index advanced 1.45 percent, with Rogers Communications Inc. (RCI.B.TO) down 3.70 percent, BCE Inc. (BCE.TO) up 1.08 percent, and Telus Corp. (T.TO) up 0.97 percent.

Precision Drilling Corp. (PD.TO) is up 4.51 percent after entering into an agreement with oilfield services provider Schlumberger Ltd. (SLB).

Onex Corp. (OCX.TO) shares slipped 0.30 percent after agreeing to acquire insurance solutions provider York Risk Services Group Inc. for $1.325 billion.

In economic news, a report from the U.S. Federal Reserve showed industrial production to have risen by a less than expected 0.2 percent in June, compared to economist estimates for a 0.4 percent increase.

Data from the U.S. Labor Department showed producer prices to have risen 0.4 percent in June, due largely due to a rebound in energy prices, following a 0.2 percent drop in May. Economists expected June prices to increase by about 0.2 percent.

A National Association of Home Builders report on Wednesday showed homebuilder confidence in the U.S. to have improved more than anticipated in July, with the NAHB/Wells Fargo Housing Market Index climbing to 53 in July from 49 in June. Economists expected a more modest increase to a reading of 50. This is the first time builder confidence has been above 50 since January this year.

According to a report from China's National Bureau of Statistics, gross domestic product expanded 7.5 percent on year in the second quarter of 2014, beating forecasts for a 7.4 percent increase. On a seasonally adjusted quarterly basis, GDP gained an annualized 2.0 percent - also beating expectations for 1.8 percent and accelerating from 1.4 percent in the first quarter.

Meanwhile, China's housing sales declined in the first half of 2014, data from the National Bureau of Statistics showed Wednesday, with home sales down 9.2 percent to CNY 2.56 trillion, from last year. Meanwhile, property investment surged about 14 percent to CNY 4.2 trillion.