TSX Ends Modestly Higher On Rising Oil Prices -- Canadian Commentary

(RTTNews) - Canadian stocks moved up to end at a near four-month high on Monday, on rising crude oil prices after the Organization of the Petroleum Exporting Countries lifted its demand growth forecast for the year. The uptick was driven by energy stocks as oil climbed for a third successive day, with mining stocks also providing support on rising prices of precious metals

Nevertheless, most global markets ended deep in the red with almost all major averages in the U.S. and Europe closing lower, due mainly over a potential Greek exit from the eurozone. Markets in the U.S. struggled to find direction with little or no U.S. economic data release for the day and with very little data coming up later this week.

Oil priced dropped sharply after the Organization of the Petroleum Exporting Countries raised its demand growth forecast for its crude oil to average 29.21 million barrels per day in 2015, an increase of 0.43 million barrels per day than previously forecast.

Investors turned jittery as Greek Prime Minister Alexis Tsipras reaffirmed his government has no plans for an extension of the bailout program, but would seek a gradual roll-back of austerity. He also noted that his campaign against austerity is 'irreversible' and the first priority is to tackle the big wounds of the bailout.

Greece's bailout program offered by the European Commission, the European Central Bank and the IMF is set to expire on February 28. Greece has tried to renegotiate the bailout terms, but the EU has rejected the request saying that the bailout conditions were generous. Meanwhile, the ECB has instructed Greek banks not to access credit by using Greek government bonds or bonds guaranteed by the government.

The benchmark S&P/TSX Composite Index closed Monday at 15,100.70, up 16.78 points or 0.11 percent. The index scaled an intraday high of 15,100.70 and a low of 15,056.60.

On Friday, the index closed down 41.00 points or 0.27 percent, at 15,083.92. The index scaled an intraday high of 15,204.45 and a low of 15,025.64.

Crude oil ended higher after the Organization of the Petroleum Exporting Countries raised its demand growth forecast for the year, even as supply glut worries eased with U.S. rig counts continuing to drop.

In its monthly report, OPEC slashed its estimate for non-OPEC supply growth by 420,000 barrels per day to average around 850,000 barrels per day in 2015, led by a reduction of 130,000 barrels per day in the U.S. due to the slowdown in the shale boom. Estimates for Colombia, Canada and Yemen were also reduced.

The Energy Index gained 1.76 percent with U.S. crude oil futures for March delivery, jumping $1.17 or 2.3 percent to settle at $52.86 percent a barrel on the New York Mercantile Exchange Monday.

Among energy stocks, Pacific Rubiales Energy Corp. (PRE.TO) gained 2.07 percent, Canadian Oil Sands (COS.TO) surged 10.32 percent, and Encana Corp. (ECA.TO) gathered 0.93 percent.

Canadian Natural Resources Limited (CNQ.TO) added 0.77 percent, while Cenovus Energy Inc. (CVE.TO) dropped 0.39 percent. Crescent Point Energy (CPG.TO) gathered 1.06 percent, and Suncor Energy (SU.TO) added 1.45 percent.

The Diversified Metals & Mining Index gained 0.78 percent, as First Quantum Minerals Ltd. (FM.TO) dropped 1.53 percent, Teck Resources Limited (TCK.B.TO) gained 3.04 percent, and HudBay Minerals (HBM.TO) inched up 0.10 percent. Finning International Inc. (FTT.TO) moved up 0.44 percent.

Gold futures ended higher amid anxiety over a potential Greek exit from the eurozone and timing of the U.S. Federal Reserve's rate hike following the better-than-expected U.S. jobs report last week.

The Global Gold Index added 1.28 percent, with gold for April delivery gaining $6.90 or 0.6 percent to settle at $1,241.50 percent on the New York Mercantile Exchange Monday.

Among gold stocks, Goldcorp Inc. (G.TO) added 2.03 percent, Kinross Gold Corp. (K.TO) gathered 1.97 percent, and Barrick Gold Corp .(ABX.TO) rose 0.78 percent.

The Capped Materials Index moved up 0.53 percent, mostly on rising gold stocks, with Potash Corp. of Saskatchewan Inc. (POT.TO) down 0.67 percent and Agrium Inc. (AGU.TO) up 0.26 percent.

The heavyweight Financial Index gained 0.42 percent, as Bank of Montreal (BMO.TO) edged up 0.17 percent, National Bank of Canada (NA.TO) dropped 0.15 percent, Royal Bank of Canada (RY.TO) moved up 0.43 percent, and Toronto-Dominion Bank (TD.TO) climbed 0.53 percent.

Bank of Nova Scotia (BNS.TO) added 0.52 percent, while Canadian Imperial Bank of Commerce (CM.TO) gathered 0.30 percent.

The Capped Industrials Index advanced 0.65 percent, as Air Canada (AC.TO) fell 0.77 percent, Canadian National Railway Company (CNR.TO) dropped 0.69 percent, and Canadian Pacific Railway Limited (CP.TO) shed 1.15 percent.

Bombardier Inc. (BBD.B.TO) dropped 2.73 percent, despite securing a firm order for 24 CRJ900 NextGen regional jets from American Airlines Inc.

The Information Technology Index edged down 0.10 percent, as BlackBerry Limited (BB.TO) dropped 1.68 percent, Constellation Software (CSU.TO) gained 1.22 percent, and Descartes Systems Group Inc. (DSG.TO) shed 1.30 percent.

The Healthcare Index dropped 0.97 percent, even as Valeant Pharmaceuticals International, Inc. (VRX.TO) fell 1.74 percent and Catamaran Corp. (CCT.TO) gathered 0.24 percent.

The Capped Telecommunication Index dropped 0.98 percent, with Canada's biggest telecom company BCE diving 2.30 percent and Manitoba Telecom Services Inc. (MBT.TO) up 2.23 percent.

Rio Alto Mining (RIO.TO) soared 11.28 percent, while Tahoe Resources (THO.TO) is sinking by 9.30 percent. The companies have agreed to combine their respective businesses and create a new, leading intermediate precious metals producer with several value-enhancing growth opportunities.

Oncolytics Biotech (ONC.TO) rose 3.77 percent. The company has filed for orphan drug designation with the FDA for high grade gliomas.

Savaria Corp. (SIS.TO) climbed 4.26 percent. The company has declared a quarterly dividend of $0.04.

In economic news, Canadian housing starts rose in January, with the annual pace of home starts up 4.3 percent to 187,276 units on a seasonally adjusted basis, Canada Mortgage & Housing Corp. said Monday. Economists forecast a reading of 178,500 according to the median of 17 responses in a Bloomberg News survey.

Elsewhere, China's trade surplus rose to a record high in January as imports plunged at the fastest rate in more than five years and export unexpectedly declined, data from the customs office showed Sunday. The trade surplus came in at $60 billion in January, more than the $48.20 billion expected by economists. In December, the surplus was at $49.61 billion. The surplus for January beat the previous record of a $54.4 billion surplus recorded in November.

Germany's trade surplus, exports and imports reached record highs in 2014, provisional data from Destatis revealed Monday. Exports increased 3.7 percent to EUR 1,133.6 billion in 2014 and imports climbed 2 percent to EUR 916.5 billion. In 2014, export and import levels were higher than the previous all-time highs recorded in 2012.

The German foreign trade balance showed a surplus of EUR 217.0 billion in 2014, which was the highest value ever recorded. A year ago, the surplus totaled EUR 195 billion.

Eurozone investor sentiment rose sharply to its highest since May 2014 on the back of the quantitative easing announced by the European Central Bank, data from the think tank Sentix showed Monday. The investor confidence index for February rose to 12.4 from 0.9 in January. This was the highest score since May 2014 and far exceeded an expected score of 3.

The Organization for Economic Cooperation and Development's (OECD) leading index signaled a stable growth momentum in the region and a positive change in growth momentum in the euro area.

The OECD composite leading indicator rose to 100.5 in December from 100.4 in November, indicating stable growth momentum in the United States, Canada, Japan, China and Brazil. While the U.K. index pointed to an easing in growth momentum, the euro area showed signs of positive growth momentum, particularly in Germany and Spain.

The indicator for India suggested firming growth, while in Russia the index continues to point to a loss in growth momentum.

Confidence among Japanese consumers improved for the second straight month in January, albeit less than expected, data from the Cabinet Office showed Monday. The consumer confidence index rose by 0.3 points to 39.1 in January from 38.8 in the previous month. Economists had forecast a 39.3 score for the month.