TSX Ends Lower On Global Cues - Canadian Commentary

(RTTNews) - Canadian stocks ended lower on Thursday, tracking mostly declining global equity markets after some soft manufacturing data out of China. The downtrend was led by financial and energy stocks after reports of some improved oil supply from Libya, while the gold index moved sharply higher.

Asian markets settled mixed on the first trading day of the New Year in the wake of disappointing manufacturing data out of China, although trading volumes remained thin due to the holidays. The European markets ended mostly in the red after China's manufacturing activity declined in December.

China's manufacturing activity eased in December as both new orders and production slowed, suggesting that the world's second largest economy still faced some downside pressure in the wake of its ongoing economic reforms and squeeze on credit. A survey by Markit Economics and HSBC showed the headline index dropped to a three-month low of 50.5 in December from 50.8 in November. Factory activity slowed in December from the previous month as export orders and output weakened.

The S&P/TSX Composite Index closed Thursday at 13,594.19, down 27.36 points or 0.20 percent. The index scaled an intraday high of 13,621.40 and a low of 13,528.29.

Crude oil plummeted to end sharply lower as the dollar strengthened and on news reports of increased Libyan oil production and export that eased supply concerns. Oil prices were also impacted after some soft manufacturing data out of China, the second largest energy consumer in the world, with renewed concerns of demand growth.

The API on Tuesday reported a larger-than-expected drop of 5.7 million barrels in U.S. crude inventories for the week ended December. 27.

The Energy Index dropped 0.73 percent, with U.S. crude oil futures for February delivery, the most actively traded contract, plummeting $2.98 or 3.0 percent to close at $95.44 a barrel Thursday on the Nymex.

Among energy stocks, Canadian Natural Resources Limited (CNQ.TO) dropped 0.64 percent, while Suncor Energy Inc. (SU.TO) lost 1.21 percent. Talisman Energy Inc. (TLM.TO) gathered 0.73 percent, while Encana Corp. (ECA.TO) dropped 1.41 percent.

TransCanada Corp. (TRP.TO) slipped 0.33 percent, after indicating the acquisition of an additional Ontario solar power facility from Canadian Solar Solutions Inc. With combined capacity of the nine solar facilities totaling 86 MW, the acquisition aggregates a total of C$500 million.

The Information Technology Index inched up 0.03 percent, with smartphone maker BlackBerry Limited (BB.TO) jumping 3.92 percent.

The Diversified Metals & Mining Index slipped 0.24 percent, with First Quantum Minerals Ltd. (FM.TO) down 0.31 percent, Lundin Mining Corp. (LUN.TO) up 0.65 percent, and Teck Resources Limited (TCK.B.TO) down 0.25 percent.

The Capped Materials Index gained 2.09 percent, due mainly to a jump in gold stocks. Fertilizer giant Potash Corp. of Saskatchewan Inc. (POT.TO) added 0.17 percent.

Gold futures ended sharply higher Thursday, due mainly on some bargain hunting with some soft data out of China supporting the precious metal's status of a safe haven asset even as global equity markets declined.

The Global Gold Index surged 4.47 percent, with gold futures for February delivery, the most actively traded contract, gaining $22.90 or 1.9 percent to close at $1,225.20 an ounce Thursday on the Nymex.

Among gold stocks, Kinross Gold Corp. (K.TO) gained 3.23 percent, while Barrick Gold Corp. (ABX.TO) surged 4.44 percent. Yamana Gold Inc. (YRI.TO) jumped 4.80 percent, while Osisko Mining Corp. (OSK.TO) soared 4.25 percent.

The Financial Index dropped 0.60 percent with Bank of Montreal (BMO.TO) slipping 0.11 percent, Royal Bank of Canada (RY.TO) adding 0.25 percent, the Bank of Nova Scotia (BNS.TO) down 0.63 percent, and Toronto-Dominion Bank (TD.TO) dropping 1.24 percent.

Manulife Financial Corp. (MFC.TO) lost 1.10 percent after announcing that its subsidiary, Manulife (International) Limited has completed the transaction to sell its life insurance business in Taiwan to CTBC Life Insurance Co., Ltd. The agreement was announced on July 31, 2013.

The Capped Industrials Index dipped 0.65 percent, with Bombardier Inc. (BBD.A.TO, BBD.B.TO) up 0.65 percent. The transportation systems maker revealed that its aerospace unit received $2.2 billion firm order for 38 Bombardier business aircraft from an undisclosed customer. The order include 28 Global business jets and 10 Challenger 605 business jets.

DATA Group Ltd. (DGI.TO), formerly known as DATA Group Inc, announced the completion of an internal reorganization that simplifies its corporate structure. The stock was up over 7.53 percent

In economic news from the U.S., the Labor Department said initial jobless claims dipped 2000 to 339,000 in the weekended December 28 from the previous week's revised figure of 341,000. The figure from the previous week was upwardly revised from the 338,000 originally reported.

A Commerce Department report on Thursday showed U.S. construction spending to have risen in line with economists' estimates in November, as increased private construction spending more than offset a drop in spending on public construction. Construction spending rose 1.0 percent to a seasonally adjusted annual rate of $934.4 billion in November from the revised October estimate of $925.1 billion.

A report from the Institute for Supply Management on Thursday showed a modest slowdown in the pace of growth in December, after reporting growth in U.S. manufacturing activity at the fastest pace in over two years in the previous month. The ISM purchasing managers index edged down to 57.0 in December from 57.3 in November, although a reading above 50 still indicates growth in the sector. Nonetheless, the modest decline was in line with economists' estimates.

From the eurozone, the German manufacturing sector expanded slightly more than initially estimated in December, final data from Markit Economics showed. The Markit/BME Purchasing Managers' Index rose to 54.3 in December from 52.7 in November. The score was slightly above the initial estimate of 54.2.

Meanwhile, eurozone manufacturing sector growth picked up further in December, as estimated in the flash report published last month, detailed results of a Markit Economics survey showed. The headline purchasing managers' index rose for a third month in a row at 52.7 in December. The reading was unchanged from the flash reading and was higher than November's score of 51.6.

German employment reached another record high in 2013, but the rise in employment was only about half of the average of 2011 and 2012, a report from Destatis said. An average of 41.78 million persons were employed in 2013, up 232,000 or 0.6 percent from the previous year. Employment hit a record for the seventh month in a row.

Data from the Markit/CIPS purchasing managers' survey for December showed activity indicator for the manufacturing sector in U.K. well above the neutral mark, indicating a strong improvement in overall operating conditions. The index declined to 57.3 from November's 33-month high of 58.1, which was revised from its initial reading. Economists expected a score of 58.4 for December.