TSX Ends Lower On Ukraine Concerns -- Canadian Commentary

(RTTNews) - Canadian stocks ended lower Friday, dragged down by some heavy selling in the energy space following a significant drop in crude oil prices. Investors continued to track declining global equity markets on concerns over escalating tensions between Russia and Ukraine with both sides toning up their rhetoric. Weakness in Europe and some disappointing earnings reports from the U.S. also contributed to the decline.

There has been no let up in tensions between Ukraine and Russia, with Moscow threatening to intervene if Kiev continued its crackdown on pro-Russian activists. The situation became more volatile in eastern Ukraine escalated after five pro-Moscow rebels were killed on Thursday with Moscow threatening to intervene if Kiev continued its crackdown on pro-Russian activists.

In a show of force, Russia ordered military drills near the border with Ukraine, renewing fears of its further intervention in the troubled region.

Meanwhile, U.S. Secretary of State John Kerry accused Moscow of playing an active role in destabilizing eastern Ukraine, and said Washington was getting ready for more sanctions on Russia.

Russia's central bank raised its main interest rate on Friday in a surprise move, citing substantial increase in inflation risks amid the escalating tensions over Ukraine that hurt the economy and attracted a rating downgrade.

Earlier today, rating agency Standard & Poor's cut Russia's credit rating to 'BBB-' from 'BBB' citing the risk of marked deterioration in external financing. S&P said the negative outlook reflects its view that Russia's ratings could be lowered over the next two years if there is an increase in the risks to the country's creditworthiness.

The S&P/TSX Composite Index closed Friday at 14,533.57, down 20.68 points or 0.14 percent. The index scaled an intraday high of 14,554.25 and a low of 14,472.08.

Yesterday, the index settled moderately higher driven by mining and financial stocks after some mixed U.S. economic data and earnings reports.

Crude oil ended sharply lower after investors opted for profit taking with U.S. crude oil stockpiles rising more than expected last week. Investors largely ignored a better-than-expected consumer sentiment reading, amid the escalating tensions between Ukraine and Russia.

The Energy Index dropped 0.54 percent, with U.S. crude oil futures for June delivery, plummeting $1.34 or 1.3 percent to close at $100.60 a barrel Friday on the Nymex.

Among energy stocks, Suncor Energy Inc. (SU.TO) dipped 0.02 percent, while Encana Corp. (ECA.TO) shed 1.46 percent. Husky Energy Inc. (HSE.TO) shed 0.90 percent and Canadian Natural Resources Ltd. (CNQ.TO) dropped 0.78 percent.

Canadian Oil Sands Limited (COS.TO) plunged 3.61 percent after announcing an unplanned maintenance-related outage at Syncrude Coker 8-1.

The Capped Healthcare Index dipped 0.42 percent with Valeant Pharmaceuticals International, Inc. (VRX.TO) down 0.43 percent, Extendicare Inc. (EXE.TO) down 0.74 percent, and Catamaran Corp. (CCT.TO) down 0.02 percent.

Gold futures ended higher as investors sought the safe haven appeal of the precious metal with rising tensions in Ukraine.

The Global Gold Index gained 2.36 percent, with gold futures for June delivery, adding $10.20 or 0.8 percent to close at $1,300.80 an ounce Friday on the Nymex.

Barrick Gold Corp. (ABX.TO) gained 2.25 percent, Agnico Eagle Mines Limited (AEM.TO) added 2.82 percent, and Yamana Gold Inc. (YRI.TO) gained 0.24 percent.

The Capped Materials Index added 1.27 percent, with Potash Corp. of Saskatchewan Inc. (POT.TO) up 1.03 percent.

The Financial Index shed 0.21 percent with the Toronto-Dominion Bank (TD.TO) down 0.04 percent, Royal Bank of Canada (RY.TO) up 0.19 percent, and Bank of Montreal (BMO.TO) down 0.23 percent.

The Diversified Metals & Mining Index gained 0.40 percent, with Lundin Mining Corp. (LUN.TO) down 0.44 percent, First Quantum Minerals Ltd. (FM.TO) up 0.70 percent, and Teck Resources Limited (TCK.B.TO) up 0.20 percent.

The Information Technology Index gathered 1.09 percent, with BlackBerry Limited (BB.TO) down 0.74 percent.

The Capped Industrials Index dropped 0.14 percent, with Bombardier Inc. (BBD.B.TO) up 1.49 percent, and Air Canada (AC.B) down 0.53 percent.

In corporate news, Progressive Waste Solutions Ltd. (BIN.TO) Friday reported a drop in earnings as well as revenues for the first quarter. Earnings, however, were in line with analysts' estimates. The stock shed 0.91 percent.

West Fraser Timber Co Ltd (WFT.TO) jumped 3.83 percent, after reporting first-quarter net earnings of C$72 million compared with C$67 million last year.

TELUS Corp. (T.TO) shed 1.09 percent after Federal officials threatened to cut it out of the big wireless spectrum auction, according to the Global and Mail.

Brookfield Office Properties Inc. (BPO.TO) dropped 0.46 percent, after reporting first-quarter net income to shareholders of $93 million or $0.15 per share, compared to $275 million or $0.48 per share previous year.

Nautilus Minerals Inc. (NUS.TO) surged 20 percent after having finalized an agreement with Papua New Guinea to explore the ocean floor for ores of copper, gold and other valuable metals.

In economic news from the U.S., a report from Thomson Reuters and the University of Michigan on Friday showed consumer sentiment index to have reached a nine-month high in April, improving more than previously estimated. A final reading on the consumer sentiment index for April came in at 84.1 compared to the preliminary estimate of 82.6. This reflects a notable increase from the final March reading of 80.0, and well above economist estimates of 83.0.

From Europe, U.K. retail sales unexpectedly rose for a second straight month in March, suggesting consumer spending is set to lead the economic recovery that is gaining momentum. Retail sales including automotive fuel rose 0.1 percent month-on-month, the Office for National Statistics said Friday. That followed a 1.3 percent gain in February, which was revised down from 1.7 percent. Economists had forecast a 0.4 percent decline for March.

The Bank of Russia in a statement said its Board of Directors have decided to raise the key rate to 7.5 percent per annum, due to higher inflation risks. Economists expected the bank to leave rates unchanged this month.