TSX Ends Lower As Resource Stocks Tumble -- Canadian Commentary

(RTTNews) - Canadian stocks ended lower Monday, dragged down by resource stocks while tracking declining global equity markets as crude oil plunged to new lows with continued worries over the global economic sluggishness. Investors also digested some mixed economic data out of the U.S.

The main index trended slightly higher mid morning, amid bargain hunting after last week's major losses. However, with oil retreating and falling to new five-year lows after a modest rebound, stocks surrendered most of the early gains. Global equity markets recorded a sharp drop, amid concerns of a slowdown in China as well as worries over the tepid economic situation in eurozone.

Investors also remained cautious ahead of the U.S. Federal Reserve's monetary policy meet outcome on Wednesday, with a weak manufacturing activity reading in New York weighing on the market.

In some upbeat economic news, U.S. industrial production climbed more than expected in November, recording its strongest growth in about 3-1/2 years, while industrial production jumped more than expected in November.

The benchmark S&P/TSX Composite Index closed Monday at 13,705.14, down 25.91 points or 0.19 percent. The index scaled an intraday high of 13,852.14 and a low of 13,635.53.

On Friday, the the index closed at 13,731.05, down 174.07 points or 1.25 percent, having shed over 5 percent last week.

Crude oil plummeted to end lower Monday, on increasing oversupply and global demand growth concerns weighed with the OPEC in no hurry to cut oil production even as oil prices continue their epic collapse.

The Energy Index shed 1.53 percent, with U.S. crude oil futures for January delivery plunging $1.90 or 3.3 percent to close at $55.91 a barrel a barrel on the Nymex Monday.

Talisman Energy Inc. (TLM.TO) surged 18.45 percent, after it confirmed Monday of talks with Spanish oil company Repsol S.A. (REPYY.PK) about a "potential corporate transaction." Talisman Energy also said it has been approached by a number of other parties regarding various transactions.

Husky Energy (HSE.TO) and CNOOC Ltd. (CNU.TO) will be in focus after saying they have begun production at the Liuhua 34-2 gas field in the South China Sea. Husky Energy shed 0.72 percent, while CNOOC is not traded yet.

Western Energy Services Corp. (WRG.TO) gained 6.71 percent after announcing plans of a 2015 capital spending budget totaling $64 million. The company also said it will buy back up to 9.9 percent of its common shares from the market.

Among other energy stocks, Canadian Natural Resources Limited (CNQ.TO) fell 3.98 percent, Pacific Rubiales Energy Corp. (PRE.TO) plummeted 12.52 percent, Suncor Energy Inc. (SU.TO) dropped 2.37 percent, and Encana Corp. (ECA.TO) shed 4.18 percent.

Cenovus Energy Inc. (CVE.TO) dropped 3.98 percent, Imperial Oil Limited (IMO.TO) slipped 2.06 percent, Crescent Point Energy Corp. (CPG.TO) gained 0.78 percent, and Enbridge Inc. (ENB.TO) moved up 0.28 percent.

Gold futures ended lower ahead of the U.S. Federal Reserve's monetary policy due Wednesday, with markets expecting the Fed to provide some clues regarding timing of interest rate hikes at the conclusion of its monetary policy meet later this week.

The Global Gold Index plunged 6.69 percent, with gold for February delivery dropping $14.80 or 1.2 percent to settle at $1,207.70 an ounce on the New York Mercantile Exchange Monday.

In the gold space, Barrick Gold Corp. (ABX.TO) plunged 8.06 percent, Agnico Eagle Mines Limited (AEM.TO) dived 7.81 percent, Goldcorp Inc. (G.TO) fell 6.74 percent, Eldorado Gold Corp. (ELD.TO) plunged 9.69 percent, and Franco-Nevada Corp. (FNV.TO) surrendered 5.52 percent.

The Capped Materials Index plunged 3.27 percent, mostly on sharply declining gold stocks, even as Potash Corp. of Saskatchewan Inc. (POT.TO) added 1.52 percent.

The heavyweight Financial Index gained 0.28 percent, as Bank of Nova Scotia (BNS.TO) fell 0.02 percent, National Bank of Canada (NA.TO) added 0.99 percent, and Toronto-Dominion Bank (TD.TO) added 0.42 percent.

Royal Bank of Canada (RY.TO) gained 0.19 percent, while Bank of Montreal (BMO.TO) jumped 1.64 percent. Canadian Imperial Bank of Commerce (CM.TO) shares fell 0.17 percent.

The Healthcare Index inched up 0.02 percent, with Valeant Pharmaceuticals International, Inc. (VRX.TO) adding 0.32 percent.

The Diversified Metals & Mining Index dropped 1.40 percent, as Teck Resources Limited (TCK.B.TO) gained 1.17 percent after having surrendered over 9 percent yesterday.

First Quantum Minerals Ltd. (FM.TO) added 2.31 percent, after announcing a temporarily shut down of its Ravensthorpe nickel operation in Western Australia due to a structural failure.

Lundin Mining Corp. (LUN.TO) dipped 1.95 percent, while Sherritt International Corp. (S.TO) dropped 3.10 percent.

The Capped Industrials Index gained 0.72 percent, even as Bombardier Inc. (BBD.B.TO) shed 1.73 percent, Canadian National Railway Company (CNR.TO) gained 1.21 percent, and Air Canada (AC.TO) dipped 0.09 percent.

CAE Inc. (CAE.TO) gained 0.61 percent, after revealing the award of a series of contracts during fiscal year 2015 third quarter, valued at more than C$115 million to provide a range of simulation products and upgrades as well as professional and long-term support services.

The Information Technology Index inched up 0.02 percent, with BlackBerry Ltd. (BB.TO) down 3.25 percent, Descartes Systems Group Inc. (DSG.TO) down 0.93 percent, and Avigilon Corp. (AVO.TO) dropping 0.49 percent.

The Capped Telecommunication Index added 0.42 percent, as BCE Inc. (BCE.TO) gained 0.21 percent, Rogers Communications Inc. (RCI.B.TO) down 0.20 percent, and TELUS Corp. (T.TO) gathered 1.12 percent.

In economic news, the Canadian Real Estate Association said existing home sales in November remained unchanged from the previous month, but revised its 2014 and 2015 sales forecast upwardly. Sales for November, not adjusted seasonally, moved up 2.7 percent from a year ago.

Meanwhile, household debt-to-income ratio in Canada jumped in the third quarter, to 162.6 percent from 161.5 percent in the second quarter, a report from Statistics Canada showed Monday.

In economic news from the U.S., the New York Federal Reserve's Empire State manufacturing index came in at negative 3.6 for December, down sharply from November's reading of 10.2. Economists expected the figure to rise to positive 12.0.

In economic news from the U.S., industrial production, a measure of output at the factories, mines and utilities, rose 1.3 percent in November, significantly higher than the growth rate of 0.1 percent in October. Economists expected production to rise 0.7 percent for the month.

U.S. Industrial production in November was up 5.2 percent compared to the same period last year.

A closely-watched measure of confidence among U.S. home builders ticked down in December by one point to 57, but was still close to the nine-year high reached in September, data from the National Association of Home Builders/Wells Fargo showed Monday. Economists expected the gauge at 59 in December from 58 recorded in November. The nine-year high score in September was 59.

Besides the crucial Fed monetary policy, other important economic events this week are the manufacturing surveys by the New York Federal Reserve and updated FOMC forecasts, as well as the Fed Chair's press briefing, both due on Wednesday.

Data on consumer price inflation, third quarter current account data, the Conference Board's leading economic indicators index for November and Kansas City Federal Reserve's regional manufacturing survey for December are also due this week.