TSX Ends Lower Tracking Global Markets -- Canadian Commentary

(RTTNews) - Canadian stocks ended lower Thursday on renewed worries over the European financial system, sparking a widespread sell-off in global equities. News that the parent company of Portugal's Banco Espirito Santo has missed short-term debt payments raised concerns about the financial situation in Europe.

Uncertainty over global economic recovery once the U.S. Federal Reserve ends its asset buying program in October is weighing as well.

According to news reports, Portugal's largest bank Banco Espirito Santo stock plummeted sharply over fears that the banks founders' were having financial difficulties that could impact Banco Espirito.

Most of the major sectors of the S&P/TSX Composite Index ended lower, with the exception of the Capped Real Estate sub-index.

Data showing an unexpected drop in U.S. jobless claims has not deterred investors from some heavy selling. Meanwhile, Chinese exports expanded less than expected in June signaling that foreign demand provide insufficient support for the economy to achieve its 7.5 percent growth target.

Disappointing industrial production data from France and Italy has raised concerns about eurozone economic recovery. Nonetheless, the Bank of England has kept its interest rate at a historic low the size of quantitative easing at GBP 375 billion as expected by economists.

The downtrend was led by energy, materials, gold, and industrial indices, with diversified metals, consumer staples, information technology, healthcare, and financial stocks faring no better.

The S&P/TSX Composite Index closed Thursday at 15,114.48, down 100.71 points or 0.66 percent. The index scaled an intraday high of 15,214.35 and a low of 15,100.15.

Crude oil futures snapped a nine-day loss to end higher on bargain hunting and with some upbeat U.S. data showing initial claims for unemployment benefits to have declined more than expected last week.

The Energy Index dropped 1.25 percent, although U.S. crude oil futures for August delivery, the most actively traded contract, gained $0.64 or 0.6 percent to close at $102.93 a barrel Thursday on the Nymex.

Among energy stocks, Canadian Natural Resources Ltd. (CNQ.TO) slipped 0.92 percent, Talisman Energy Inc. (TLM.TO) fell 0.92 percent, Suncor Energy Inc.(SU.TO) dropped 1.42 percent, Cenovus Energy Inc. (CVE.TO) shed 0.59 percent, Encana Corp. (ECA.TO) surrendered 1.04 percent, and Imperial Oil Limited (IMO.TO) dropped 1.02 percent.

The Financial Index shed 0.25 percent with Toronto-Dominion Bank down 0.24 percent, National Bank of Canada (NA.TO) down 0.15 percent, Bank of Nova Scotia (BNS.TO) down 0.18 percent, and Royal Bank of Canada (RY.TO) down 0.20 percent. Bank of Montreal (BMO.TO) surrendered 0.20 percent, while Canadian Imperial Bank Of Commerce (CM.TO) shed 15 percent.

The Capped Healthcare Index edged down 0.06 percent with Valeant Pharmaceuticals International, Inc. (VRX.TO) shed 0.43 percent and Catamaran Corp. (CCT.TO) dropped 0.58 percent. Meanwhile, Extendicare Inc. (EXE.TO) gained 0.85 percent.

Gold futures ended at a near four-month high with traders seeking safer assets amid a sell-off in European equity markets.

The Global Gold Index shed 1.83 percent, with gold futures for August delivery gaining $14.90 or 1.1 percent to close at $1,339.20 an ounce Thursday on the Nymex.

Among gold stocks, Yamana Gold Inc. (YRI.TO) slipped 1.57 percent, Kinross Gold Corp. (K.TO) shed 2.37 percent, Eldorado Gold Corp. (ELD.TO) down 4.50 percent, and Barrick Gold Corp. (ABX.TO) down 1.89 percent.

The Capped Materials Index dived 1.65 percent, with Potash Corp. of Saskatchewan Inc. (POT.TO) down 1.98 percent.

The Diversified Metals & Mining Index slipped 0.43 percent, with Lundin Mining Corp. (LUN.TO) down 0.96 percent, Teck Resources Limited (TCK.B.TO) down 0.12 percent, and First Quantum Minerals Ltd. (FM.TO) down 0.15 percent.

The Information Technology Index shed 0.84 percent, with BlackBerry Limited (BB.TO) slipping 0.08 percent and CGI Group Inc. (GIB.A.TO) down 0.79 percent. Constellation Software Inc. (CSU.TO) fell 1.56 percent, while Avigilon Corp. (AVO.TO) dropped 0.79 percent,

The Capped Industrials Index dived 1.08 percent, with Bombardier Inc. (BBD.B.TO) down 0.27 percent, Air Canada (AC.B.TO) down 1.03 percent, and Canadian National Railway Company (CNR.TO) dropped 1.47 percent. Canadian Pacific Railway Limited (CP.TO) shed 1.34 percent, SNC-Lavalin Group Inc. (SNC.TO) fell 1.28 percent, and Finning International Inc. (FTT.TO) shed 0.70 percent.

The Capped Telecommunications Index dipped 0.08 percent, with Rogers Communications Inc. (RCI.B.TO) edging up 0.02 percent, BCE Inc. (BCE.TO) up 0.23 percent, and Telus Corp. (T.TO) down 0.56 percent.

Corus Entertainment Inc. (CJR.B.TO) shed 3.04 percent after reporting adjusted net income attributable to shareholders of $41.6 million for the third quarter, up 21 percent from same period last year.

Lundin Petroleum AB (LUP.TO) dropped 3.09 percent after revealing an agreement with Arawak Energy Russia BV, to sell its entire interests in the Sotchemyu-Talyu and the North Irael Fields, Komi Region, Russia.

Microbix Biosystems Inc. (MBX.TO) gained 1.63 percent after announcing the commencement of a new patent litigation in the Court of Dusseldorf, Germany against Novartis Vaccines and Diagnostics, alleging infringement of its Virusmax patent in Europe.

On the economic front, Statistics Canada's new housing price index inched up by 0.1% in May, lower than forecast for an increase of 0.3% and following a 0.2% rise in April.

In economic news from the U.S., a report from the Labor Department first-time jobless claims to have unexpectedly declined to 304,000 in the week ended July 5, down 11,000 from the previous week's unrevised level of 315,000. Economists had expected claims to come in unchanged compared to the previous week.

Meanwhile, a report from the Commerce Department showed wholesale inventories in the U.S. to have risen by a slightly less than anticipated 0.5 percent in May, after jumping by a revised 1.0 percent in April. Economists had expected inventories to climb by about 0.6 percent compared to the 1.1 percent increase originally reported for the previous month.

China's exports grew 7.2 percent in June from last year, data from the General Administration of Customs showed Thursday. Although the annual growth was faster than the 7 percent rise posted in May, it was below the 10.4 percent increase forecast by economists.

China's imports also climbed by a less-than-expected 5.5 percent in June. It reversed May's 1.6 percent fall but was weaker than the expected 6 percent growth. Trade surplus dropped to $31.6 billion from $35.9 billion in May, when it was forecast to rise to $36.9 billion.

In economic news from Europe, France and Italy reported a notable drop in industrial output in May, while the Dutch industrial production grew at a slower rate in May.

Elsewhere, the Bank of England kept its interest rate at a historic low with the size of quantitative easing at GBP 375 billion as expected by economists.