TSX Ends Lower On Weak Commodities, Fed - Canadian Commentary

(RTTNews) - Canadian stocks ended lower Monday, with commodities struggling even as concerns surfaced that the U.S. Federal Reserve may begin tapering its quantitative easing program sooner than expected. Investors also weighed China's wide-ranging reforms to allow its transition towards a consumption-driven economy, although remained cautious ahead of the Fed policy review meet later this week.

Philadelphia Federal Reserve President Charles Plosser, said the Fed should end its monthly bond-buying program with the U.S. economy likely to clock a 3 percent growth in 2014. Speaking to the Risk Management Association, Plosser opined the unemployment rate would likely drop to 6.25 percent end 2014, and the Fed should declare the quantum of assets it proposes to buy and then end the program accordingly.

As well, the New York Federal Reserve President William Dudley speaking at Queens College, indicated that he believed the economy would do well over the next two years, setting off concerns the central bank would begin tapering its monetary stimulus program soon.

Unveiling a raft of reforms, China on Friday announced plans to allow more private investment in the state sector, build a more impartial and sustainable social security system, while letting Chinese companies and individuals make investments offshore more easily.

The S&P/TSX Composite Index closed Monday at 13,458.06, down 24.51 points or 0.18 percent. The index touched an intraday high of 13,512.47 and a low of 13,441.40.

Crude oil prices ended sharply lower on demand growth concerns as the supply scenario remained fluid after Saudi Arabia increased its oil production and exports, with September shipments scaling an eight-year high.

The Energy Index shed 0.82 percent, with U.S. crude oil futures for December delivery, the most actively traded contract, dropping $0.81 or 0.9 percent to close at $93.03 a barrel Monday on the Nymex.

Among energy stocks, Imperial Oil Limited (IMO.TO) gained 1.17 percent, while Encana Corp. (ECA.TO) added 0.98 percent. Suncor Energy Inc. (SU.TO) shed 0.62 percent, while Canadian Natural Resources (CNQ.TO) lost 1.38 percent.

The Information Technology Index slipped 0.03 percent, with smartphone maker BlackBerry Limited (BB.TO) down 4.89 percent.

The Diversified Metals & Mining Index shed 0.79 percent, with First Quantum Minerals Ltd. (FM.TO) dropping 0.11 percent and Lundin Mining Corp. (LUN.TO) dipping 0.68 percent. Teck Resources (TCK_B.TO) surrendered 0.80 percent.

The Capped Materials Index dropped 1.29 percent, with Potash Corporation of Saskatchewan Inc.(POT.TO) edged up 0.03 percent.

Gold futures snapped a two-day gain to end sharply lower as investors turned to riskier equity assets, tracking mostly rising global markets, with investor concerns resurfacing that the Federal Reserve would begin tapering its $85 billion quantitative easing program sooner than later,

The Global Gold Index declined 2.15 percent, with gold futures for December delivery, the most actively traded contract, plummeting $15.10 or 1.2 percent to close at $1,272.30 an ounce Monday on the Nymex.

Among gold stocks, Yamana Gold Inc. (YRI.TO) dropped 1.95 percent, while Goldcorp Inc. (G.TO) shed 0.79 percent. Kinross Gold Corp. (K.TO) plunged 4.31 percent, while Eldorado Gold Corp. (ELD.TO) surrendered 3.80 percent. B2Gold Corp. (BTO.TO) dropped 2.11 percent, while Barrick Gold Corp. (ABX.TO) slipped 2.49 percent.

The Financial Index added 0.54 percent with Bank of Montreal (BMO.TO) down 0.26 percent, while Royal Bank of Canada (RY.TO) gained 0.25 percent. The Bank of Nova Scotia (BNS.TO) moved up 0.56 percent, while Toronto-Dominion Bank (TD.TO) gathered 0.57 percent. National Bank of Canada (NA.TO) dropped 0.45 percent.

The Capped Industrials Index gained 0.24 percent, with Bombardier Inc. (BBD.A.TO, BBD.B.TO) adding 0.22 percent. The company was awarded $282 million dual-class Q400 NextGen aircraft orders from Palma Holding Limited.

The Capped Telecommunications Index added 0.15 percent with BCE Inc. (BCE.TO) adding 0.19 percent.

Wood products company Stella-Jones (SJ.TO) dropped 0.93 percent after announcing the acquisition of wood treating facilities in Oregon, Nevada and Arizona from The Pacific Wood Preserving Cos., for an estimated $33 million.

In economic news, Statistics Canada said foreign investment in Canadian securities strengthened to $8.4 billion in September and was focused on Canadian equities. Meanwhile, Canadian investors reduced their holdings of foreign securities in the month by $1.5 billion, including both debt and equity securities.

In economic news from the U.S., a report released by the National Association of Home Builders revealed the NAHB/Wells Fargo Housing Market Index at 54 in November, unchanged from the revised reading for October. Economists expected the index to come in unchanged compared to the 55 originally reported for the previous month.

Elsewhere, euro area current account surplus declined to a seasonally adjusted EUR 13.7 billion in September from EUR 17.9 billion in August, the European Central Bank reported. Surplus on goods trade decreased to EUR 13.7 billion from EUR 14.7 billion in August. Likewise, the surplus on services dropped to EUR 7.6 billion in September from EUR 8.2 billion.

Meanwhile, eurozone foreign trade surplus increased markedly in September, data from the statistical office Eurostat showed. The region's trade in goods with the rest of the world resulted in a surplus of EUR 13.1 billion in September, up from EUR 6.9 billion surplus in August. A year earlier, the surplus amounted to 8.6 billion.