TSX Ends Lower Amid US Shutdown Concerns - Canadian Commentary

(RTTNews) - Canadian stocks ended lower Monday, amid fears of an impending shutdown of the U.S. government on the budget and debt ceiling stalemate. With heightened investor anxiety as the deadline draws closer, the onus was squarely on the Congress to pass a short-term budget by midnight Monday to keep the government open.

The stalemate over U.S. budget and debt was mired in disagreement over President Barack Obama's healthcare initiatives. Nonetheless, the Congress must pass a short-term budget by midnight on Monday in order to keep the government open. The stalemate over the federal budget continued with the Senate rejecting the bill passed by the Republican-run House of Representatives.

Investor sentiments were also impacted by some disappointing data out of China as well as political turmoil in Italy where Prime Minister Enrico Letta is expected to call for a confidence vote later this week.

The S&P/TSX Composite Index closed Monday at 12,787.19, down 56.89 points or 0.44 percent. The index touched an intraday high of 12,858.60 and a low of 12,734.71.

The Diversified Metals & Mining Index dropped 1.22 percent, with Teck Resources Limited (TCK.B.TO) down 1.49 percent and Lundin Mining Corp. (LUN.TO) down 1.09 percent. Osisko Mining Corp. (OSK.TO) dropped 1.70 percent.

The Capped Materials Index shed 0.36 percent, with Potash Corporation of Saskatchewan Inc.(POT.TO) shedding 1.11 percent.

The Global Gold Index gained 0.1 percent, although gold futures for December delivery shed $12.20 or 0.9 percent to close at $1,327.00 an ounce Monday on the Nymex.

Yamana Gold Inc. (YRI.TO) gained 0.28 percent, while IAMGOLD Corp. (IMG) ended flat at $4.92. B2Gold Corp. (BTO.TO) dropped 2.28 percent, while Goldcorp Inc. (G.TO) added 0.94 percent. Kinross Gold Corporation (K.TO) edged up 0.78 percent, while Eldorado Gold Corp. (ELD.TO) gained 1.31 percent. Barrick Gold Corp. (ABX.TO) gained 0.37 percent.

Crude oil ended lower Friday, over concerns of a possible government shutdown in Washington on the budget and debt ceiling impasse.

The Energy Index dropped 0.49 percent, with U.S. crude oil futures for November delivery dropping $0.54 or 0.5 percent to close at $102.33 a barrel Monday on the Nymex.

Among energy stocks, Canadian Natural Resources Limited (CNQ.TO) dropped 0.22 percent, Talisman Energy Inc. (TLM.TO) down 0.25 percent, and Suncor Energy Inc.(SU.TO) surrendered 1.31 percent. Enbridge Inc. (ENB.TO) gained 0.26 percent, while Imperial Oil Limited (IMO.TO) slipped 0.57 percent.

Pacific Rubiales Energy Corp. (PRE.TO) lost 5.47 percent after announcing the acquisition of Petrominerales Ltd. (PMG.TO) in exchange of C$11.00 cash for each Petrominerales common share held, for a total value of approximately C$935 million, plus one common share of a newly formed exploration and production company. Petrominerales shares skyrocketed 51.16 percent to C$11.70.

The Financial Index surrendered 0.57 percent with Bank of Montreal (BMO.TO) up 0.22 percent and Manulife Financial Corp. (MFC.TO) down 1.96 percent. The Bank of Nova Scotia (BNS.TO) shed 0.22 percent, while Toronto-Dominion Bank (TD.TO) inched up 0.01 percent. Royal Bank of Canada (RY.TO) surrendered 0.81 percent, while National Bank of Canada (NA.TO) lost 0.51 percent.

The Information Technology Index shed 0.83 percent, with smartphone maker BlackBerry Limited (BB.TO) down 2.17 percent.

The Capped Industrials Index dropped 0.66 percent, with Bombardier Inc. (BBD.A.TO, BBD.B.TO) down 1.44 percent.

Commercial real estate owner Brookfield Property Partners L.P.(BPY_UN.TO) dropped 0.05 percent after announcing that it would acquire Brookfield Office Properties Inc. (BPO.TO) for $19.34 per common share of BPO. The transaction is valued at $5 billion. Meanwhile, shares of BPO surged 14.17 percent.

In economic news, Statistics Canada said real gross domestic product rebounded from a 0.5 percent decline in June to grew 0.6 percent in July. Goods production rose 1.2 percent in July. Construction, manufacturing, as well as mining and oil and gas extraction all increased, while utilities and the agriculture and forestry sector declined.

Separately, the agency said the Industrial Product Price Index increased 0.2 percent in August, mainly due to higher prices for primary metal products. Meanwhile, the Raw Materials Price Index rose 0.9 percent as a result of higher prices for crude oil and non-ferrous metals.

In economic news from the U.S., manufacturing activity in the Chicago-area picked up in September, as factories continued to report increases in new orders. The headline index of the Chicago Purchasing Managers report, an important gauge of manufacturing in the Midwest, advanced to 55.7 in September from August's 53.0 reading. Economists expected a smaller rise of the index at 54.0.

An indicator of manufacturing activity in China, the headline purchasing managers' index edged up to 50.2 in September from 50.1 in August, according to the final outcome of a survey by HSBC and Markit Economics. The reading was below the flash reading of 51.2. A PMI reading above 50, however, indicates expansion of the sector.

Elsewhere, eurozone inflation slowed more than expected to 1.1 percent in September, the lowest since February 2010, from 1.3 percent in August, preliminary data from Eurostat showed. It was forecast to slow to 1.2 percent. Final data for September consumer prices are due on October 16.

Germany's retail sales increased less than forecast by economists in August, data from the Federal Statistical Office revealed. Retail sales grew 0.5 percent month-on-month on a seasonally and working day adjusted basis in August. This was weaker than the 0.7 percent growth expected.