TSX Ends Lower As Resource Stocks Decline -- Canadian Commentary

(RTTNews) - Canadian stocks ended lower for second straight session on Wednesday, after witnessing a steep plunge yesterday, on continued declines in U.S. equity markets as energy stocks dropped with oil prices plunging. Most major sectors of the main index declined, led by mining, energy, and materials stocks.

Markets in Europe ended in positive territory, following yesterday's weak performance. Bargain hunting was partly responsible for the uptick, as investors picked up stocks at low prices. The rebound in shares of Volkswagen after 2 days of sharp declines also improved the mood among investors.

Martin Winterkom, the beleaguered CEO of European giant Volkswagen AG, resigned after taking responsibility for the emission scandal that has played havoc with its reputation and market value.

Earlier this week, Volkswagen admitted to charges by the U.S. government over installation of software to hoodwink emissions controls on nearly half a million diesel vehicles sold in the U.S. since 2008.

Markets in the United States ended modestly lower after some choppy trade, with stocks showing a lack of direction throughout much of the day. The drop on Wall Street partly reflected continued uncertainty over the outlook for U.S. monetary policy following last week's Federal Reserve decision.

Uncertainty about the outlook for U.S. monetary policy is keeping some investors on the sidelines as they await a speech from Janet Yellen. The Fed Chair is expected to address a University of Massachusetts event after the close of market on Thursday.

In some soft economic news, U.S. manufacturing activity in September came in line with its slowest pace of growth in 22 months, a flash reading from Markit showed Wednesday. Meanwhile, Chinese manufacturing activity contracted the most in six-and-a-half years in September, as orders and production declined at faster rates.

The benchmark S&P/TSX Composite Index closed Wednesday at 13,383.69, down 107.40 points or 0.80 percent. The index scaled an intraday high of 13,560.07 and a low of 13,378.01.

On Tuesday, the index closed down 288.35 points or 2.09 percent, at 13,491.09. The index scaled an intraday high of 13,646.13 and a low of 13,452.51.

The Diversified Metals & Mining Index dropped 3.32 percent, as First Quantum Minerals (FM.TO) plummeted 4.15 percent and Teck Resources Limited (TCK-B.TO) shed 3.37 percent.

Lundin Mining Corporation (LUN.TO) added 0.26 percent, while HudBay Minerals Inc. (HBM.TO) plunged 4.85 percent.

The heavyweight Financial Index shed 0.47 percent, as Royal Bank of Canada (RY.TO) dipped 0.19 percent and National Bank of Canada (NA.TO) dropped 1.16 percent.

Toronto-Dominion Bank (TD.TO) fell 0.60 percent, Bank of Nova Scotia (BNS.TO) dropped 1.07 percent, Canadian Imperial Bank Of Commerce shed 0.14 percent, and Bank of Montreal (BMO.TO) surrendered 0.34 percent.

Crude oil prices plunged after a report from the U.S. Energy Information Administration showed an increase in domestic production with the upcoming refinery maintenance season. The drop in prices is despite a more than expected decline in U.S. crude stockpiles last week. Gasoline supplies rose 1.4 million barrels, with analysts anticipating an increase of 0.45 million barrels last week.

Data from the U.S. Energy Information Administration showed crude stockpiles in the U.S. to have dropped 1.9 million barrels in the week ended September 18, while analysts anticipated a decline of 0.7 million barrels.

The Energy Index dived 2.24 percent, with U.S. crude oil futures for November delivery plummeting $1.88 or 4.1 percent, to settle at $44.48 a barrel on the New York Mercantile Exchange Wednesday.

Among energy stocks, Crescent Point Energy Corp. (CPG.TO) plunged 6.36 percent, Canadian Natural Resources Limited (CNQ.TO) dropped 2.85 percent, and Canadian Oil Sands (COS.TO) fell 3.09 percent.

Cenovus Energy (CVE.TO) lost 1.88 percent, while Baytex Energy Corp. plummeted 11.63 percent. Encana Corp. (ECA.TO) dived 4.24 percent, while Suncor Energy (SU.TO) shed 1.36 percent.

Gold futures ended higher amid concerns over the global economy and the performance of global stocks, even as the dollar trended lower.

The Gold Index fell 0.33 percent, as gold for December delivery gained $6.70 or 0.6 percent, to settle at $1,131.50 an ounce on the New York Mercantile Exchange Wednesday.

Among gold stocks, Yamana Gold Inc. (YRI.TO) dipped 0.46 percent, Goldcorp Inc. (G.TO) fell 0.65 percent, and Eldorado Gold (ELD.TO) slipped 0.77 percent.

Kinross Gold Corp. (K.TO) dropped 2.31 percent, while Barrick Gold (ABX.TO) shed 2.35 percent.

The Capped Materials Index surrendered 1.73 percent, as Potash Corp. of Saskatchewan Inc. (POT.TO) plunged 4.81 percent, having surrendered 6.47 percent yesterday.

Agnico Eagle Mines Limited (AEM.TO) gained 0.92 percent, while Agrium Inc. (AGU.TO) slipped 2.49 percent. Franco-Nevada Corp. (FNV.TO) added 1.67 percent, while Silver Wheaton (SLW.TO) dropped 1.15 percent.

The Capped Health Care Index inched up 0.03 percent, as Valeant Pharmaceuticals International (VRX.TO) gained 0.90 percent, Extendicare Inc. (EXE.TO) fell 0.25 percent, and Concordia Healthcare Corp. (CXR.TO) gathered 1.21 percent.

The Capped Information Technology Index shed 0.22 percent, as BlackBerry Limited (BB.TO) fell 0.52 percent, after reporting it will lay off 200 workers amid concerns over the success of its upcoming Android device. BlackBerry also closed its acquisition of AtHoc today.

Descartes Systems Group (DSG.TO) moved up 0.41 percent, and Constellation Software (CSU.TO) added 0.46 percent.

The Capped Telecommunication Index edged down 0.06 percent, as Rogers Communication (RCI-B.TO) moved up 0.13 percent and BCE Inc. (BCE.TO) added 0.30 percent.

TELUS Corp. (T.TO) dropped 0.49 percent, while Manitoba Telecom Services Inc. (MBT.TO) slipped 0.17 percent.

The Capped Industrials Index fell 1.09 percent, as Bombardier (BBD-B.TO) plummeted 8.62 percent, Finning International Inc. (FTT.TO) fell 1.29 percent, and Air Canada gathered 0.50 percent.

Canadian Pacific Railway (CP.TO) fell 1.15 percent, while Canadian National Railway (CNR.TO) dropped 1.71 percent.

WestJet Airlines (WJA.TO) slipped 0.04 percent. The company announced the appointment of Harry Taylor as executive vice president and chief financial officer, effective October 26, 2015.

On the economic front, data from Statistics Canada showed Canada's retail sales to have risen 0.5 percent on month to C$43.3 billion in July, following a downwardly revised 0.4 percent increase a month earlier. Economists anticipated sales to rise by 0.8 percent.

Excluding autos, retail sales were flat in July - also down from the 0.5 percent growth expected by economists. This follows a revised 0.5 percent rise in June.

U.S. manufacturing activity in September matched its slowest pace of growth in 22 months, a flash reading from Markit showed Wednesday. The flash PMI came in unchanged at 53.0 last month, the lowest level since October 2013.

Chinese manufacturing activity contracted the most in six-and-a-half years in September, as orders and production declined at faster rates. The flash manufacturing Purchasing Managers' Index fell to 47 in September from 47.3 in August, survey data from Caixin Insight Group and Markit showed Wednesday. This was the lowest score in 78 months and was below the consensus estimate of 47.5.

Data from Markit showed that the flash Eurozone services Purchasing Managers' Index declined to 54 in September from 54.4 in the prior month. It was below the expected score of 54.2. The manufacturing PMI fell to 52, in line with forecast, from 52.3 in August. The composite output index dropped to 53.9 from 54.3 in August. It was expected to fall to 54.

Eurozone private sector growth eased slightly in September but the overall economic growth is expected to be maintained at 0.4 percent in the third quarter underpinned by new orders. The composite output index dropped to 53.9 in September from 54.3 in August, flash data from Markit revealed Wednesday. Nonetheless, it was below the expected score of 54.

Germany's private sector growth slowed slightly in September, flash data from Markit showed Wednesday. The composite output index fell to 54.3 in September from 55 in August.

The French private sector growth improved in September as both manufacturing and services expanded from prior month, flash survey data from Markit showed Wednesday. The flash composite output index rose to 51.4 in September from 50.2 in August. Private sector output expanded for the eighth successive month.

The French economy stalled as estimated in the second quarter, final data from the statistical office Insee showed Wednesday. Gross domestic product remained stable after expanding 0.7 percent in the first quarter and 0.1 percent in the fourth quarter of 2014. The second quarter growth rate came in line with the estimate published on August 14.