TSX Ends Lower As Energy Stocks Tumble -- Canadian Commentary

(RTTNews) - Canadian stocks plunged over 1 percent to end lower for a third straight session Wednesday, tracking declining global equity markets, as oil prices plummeted to 6-year lows on supply glut fears with weekly stockpiles in the U.S. rising more than expected.

The majority of the Canadian sectors ended in the red, led by a steep plunge in the energy sector, with the notable exception of gold stocks that rebounded on rising gold prices.

Markets in Europe ended firmly in the red Wednesday on growing anxiety over China's economy, even as uncertainty over the Federal Reserve's policy outlook weighed on investor sentiment. Meanwhile, German lawmakers backed a third bailout package for Greece despite misgivings among some conservative lawmakers.

Markets in the United States also ended in negative territory, with the Fed reserve non-committal as to when a rate hike would be introduced.

In a strong sign that the Fed is considering a September rate hike, the minutes from the FOMC said the pace of job gains had been "solid," with a range of labor market indicators suggesting that under-utilization of labor resources had continued to diminish.

The minutes from July meeting showed the Federal Reserve is moving closer to raising interest rates. Most members judged that the conditions for tightening had not yet been achieved, but noted conditions were "approaching that point."

In some soft economic news, consumer prices in the U.S. increased modestly in July, with the pace of growth short of analyst estimates.

The benchmark S&P/TSX Composite Index closed Wednesday at 14,036.63, down 157.24 points or 1.11 percent. The index scaled an intraday high of 14,187.62 and a low of 14,013.99.

On Tuesday, the index closed at 14,198.65, down 52.88 points or 0.37 percent. The index scaled an intraday high of 14,227.44 and a low of 14,125.54.

Crude oil futures ended at a six-year low after official weekly crude oil inventory data from the U.S. Energy Information Administration showed stockpiles to have increased more than expected last week.

A weekly report from the U.S. Energy Information Administration showed U.S. crude oil inventories to have increased 2.6 million barrels in the week ended August 14, while analysts expected stocks to decline 0.8 million barrels.

The report showed total U.S. crude oil inventories at 456.2 million barrels end last week, which is near levels not seen for this time of the year in the last 80 years.

The Energy Index plunged 4.30 percent, with U.S. crude oil futures for October delivery, the most actively traded contract, plummeting $1.85 or 4.3 percent, to settle at $41.27 a barrel on the New York Mercantile Exchange Wednesday.

Crescent Point Energy Corp. (CPG.TO) shed 6.71 percent, while Suncor Energy Inc. (SU.TO) dropped 3.22 percent. Encana Corp. (ECA.TO) dropped 4.90 percent, Baytex Energy Corp. (BTE.TO) plummeted 15.98 percent, and Canadian Natural Resources Limited (CNQ.TO) fell 5.57 percent.

The Diversified Metals & Mining Index dropped 0.53 percent, as First Quantum Minerals (FM.TO) slipped 0.26 percent, Teck Resources Limited (TCK-B.TO) gained 1.19 percent, HudBay Minerals Inc. (HBM.TO) fell 2.50 percent, and Sherritt International Corp. (S.TO) fell 2.83 percent.

Gold futures ended sharply higher with investors seeking the safe haven appeal of the precious metal with the riskier equity markets in U.S. and Europe declining, after some soft inflation data.

The Gold Index jumped 3.59 percent, with gold for December delivery surging $11.00 or 1.0 percent, to settle at $1,127.90 an ounce on the New York Mercantile Exchange Wednesday.

Among gold stocks, Kinross Gold Corp. (K.TO) added 3.82 percent, Barrick Gold Corp. (ABX.TO) moved up 3.71 percent, Goldcorp Inc. (G.TO) added 2.90 percent, and Yamana Gold Inc. (YRI.TO) gathered 4.18 percent.

Eldorado Gold Corp. (ELD.TO) tumbled 7.14 percent, after the Greek government halted the company's activities in the Halkidiki region of northern Greece.

The Capped Materials Index gained 1.11 percent, mainly on the strength of gold stocks. Agrium Inc. (AGU.TO) shed 0.91 percent, while Agnico Eagle Mines Limited (AEM.TO) jumped 7.64 percent. Potash Corp. of Saskatchewan Inc. (POT.TO) dropped 0.72 percent.

The heavyweight Financial Index fell 0.74 percent, as National Bank of Canada (NA.TO) dropped 2.12 percent, Bank of Montreal (BMO.TO) shed 0.83 percent, and Royal Bank of Canada (RY.TO) added 0.21 percent.

Toronto-Dominion Bank (TD.TO) fell 0.73 percent, Bank of Nova Scotia (BNS.TO) fell 1.22 percent, and Canadian Imperial Bank of Commerce (CM.TO) dipped 0.79 percent.

The Capped Health Care Index fell 0.81 percent as Valeant Pharmaceuticals International, Inc. (VRX.TO) dropped 1.73 percent, Extendicare Inc. (EXE.TO) dipped 0.37 percent, and Concordia Healthcare Corp. (CXR.TO) added 0.36 percent.

The Capped Information Technology Index declined 0.74 percent, as BlackBerry Limited (BB.TO) slipped 0.51 percent.

The Capped Telecommunication Index gained 0.21 percent, as Rogers Communication (RCI-B.TO) added 1.36 percent, TELUS Corp. (T.TO) dropped 0.40 percent, Manitoba Telecom Services Inc. (MBT.TO) and BCE Inc. (BCE.TO) shed 0.59 percent.

The Capped Industrials Index fell 1.89 percent, even as Bombardier (BBD.B.TO) slipped 1.65 percent and Finning International Inc. (FTT.TO) dipped 2.46 percent.

Canadian Pacific Railway (CP.TO) shed 2.11 percent, while Canadian National Railway (CNR.TO) lost 1.84 percent. AutoCanada (ACQ.TO) plunged 6.82 percent.

On the economic front, consumer prices in the U.S. saw a modest increase, with the consumer price index edging up 0.1 percent in July after climbing by 0.3 percent in June and 0.4 percent in May. Economists expected prices to rise by 0.2 percent.

The euro area current account surplus increased for the first time in five months, the European Central Bank reported Wednesday. The current account surplus rose to a 3-month high of EUR 25.4 billion in June from EUR 19.1 billion in May. This was the first increase since February.

Eurozone construction output decreased in June after rising in the previous month, figures from Eurostat showed Wednesday. Construction output fell a seasonally adjusted 1.9 percent month-over-month in June, in contrast to a 0.2 percent increase in May, which was revised down from the 0.3 percent hike reported earlier.

The U.K. household finance index declined to the lowest level in eight months in August, as households expect a hike in interest rates over the next 12 months, survey data from Markit Economics showed Wednesday.

The seasonally adjusted household finance index, which measures overall perceptions of financial well being and aims to track consumer behavior, dropped to 43.4 in August from 45.1 in July.

A score below 50 suggests pessimism regarding finances among the U.K. households. The latest reading was the lowest so far this year, but still above the average since the survey began around six-and-a-half years ago.

Fitch Ratings upgraded Greece's sovereign ratings by one notch to 'CCC' while indicating that the agreement between Greece and the European institutions last week on the framework for a third bailout has reduced the risk of Greece defaulting.