TSX Ends Sharply Lower As Oil Plummets -- Canadian Commentary

(RTTNews) - Canadian stocks snapped a five-day gain to end sharply lower on Wednesday, tracking declining global equity markets amid falling commodity prices with oil prices plummeting to new 6-year lows, ending below $45 a barrel.

Canadian stock market had struggled to find direction Wednesday morning, continuing to bounce back and forth between positive and negative territory, with almost all sectors ending in the red at close.

Markets in Europe turned in a mixed performance, even as concerns over developments in Greece persisted. Greek stocks extended their selling on concerns over tightening liquidity conditions in the country's banking sector. On a positive note, German consumer confidence rose to its highest level in 13 years.

Markets in the United States extended the sell-off seen in the previous session, with the Dow falling to its lowest closing level in over a month. The major averages saw further downside at close, ending the session near their worst levels of the day.

Investors also digested the Federal Reserve's first monetary policy announcement of the New Year following the central bank's two-day meeting.

As was widely expected, the Fed left interest rates unchanged, while reiterating its pledge to remain patient in beginning to normalize monetary policy. The Fed upgraded its assessment of the economy, indicating economic activity has been expanding at a solid pace since its December meeting.

The Federal Reserve said, "Based on its current assessment, the Committee judges that it can be patient in beginning to normalize the stance of monetary policy." The statement suggests the Fed is unlikely to raise interest rates until at least June, but probably later.

While the Fed also said inflation is expected to decline further in the near term, it still expects inflation to rise gradually toward the 2 percent target over the medium term.

The benchmark S&P/TSX Composite Index closed Wednesday at 14,602.88, down 231.00 points or 1.56 percent. The index scaled an intraday high of 14,852.68 and a low of 14,599.65.

On Tuesday, the index closed up 36.05 points or 0.24 percent, at 14,833.88. The index scaled an intraday high of 14,838.84 and a low of 14,656.27.

Crude oil plunged to end below the $45-mark on Wednesday, after an official weekly oil report from the Energy Information Administration showed crude stockpiles in the U.S. to have surged more than expected last week, with inventories at an 80-year high.

A weekly report from the Energy Information Administration showed U.S. crude oil inventories to have jumped 8.9 million barrels in the week ended January 23, while analysts expected an increase of 3.5 million barrels. The report showed U.S. crude oil inventories at 406.7 million barrels end last week.

Gasoline stocks dropped by 2.6 million barrels last week, while analysts anticipated an increase of 0.8 million barrels. Inventories of distillate, including heating fuel, dropped 3.9 million barrels with analysts expecting a decline of 0.6 million barrels.

The American Petroleum Institute late Tuesday said crude oil supplies in the U.S. rose 13 million barrels last week.

The Energy Index plummeted 4.86 percent, with U.S. crude oil futures for March delivery, diving $1.78 or 3.9 percent, to settle at $44.45 a barrel on the New York Mercantile Exchange Wednesday.

Among energy stocks, Pacific Rubiales Energy Corp. (PRE.TO) plunged 12.70 percent, Canadian Oil Sands Limited (COS.TO) tanked 10.36 percent, Legacy Oil + Gas Inc. (LEG.TO) plummeted 14.53 percent, Athabasca Oil Corporation (ATH.TO) dived 10.58 percent, Canadian Natural Resources Limited (CNQ.TO) shed 3.69 percent, and Suncor Energy Inc. (SU.TO) fell 2.37 percent.

Encana Corp. (ECA.TO) slumped 5.89 percent, while Cenovus Energy Inc. (CVE.TO) surrendered 7.01 percent. Crescent Point Energy (CPG.TO) fell 5.31 percent

The Diversified Metals & Mining Index fell 1.48 percent, as First Quantum Minerals Ltd. (FM.TO) surrendered 0.83 percent and Lundin Mining Corp. (LUN.TO) shed 2.63 percent.

Teck Resources Limited (TCK.B.TO) dropped 0.57 percent, Finning International Inc. (FTT.TO) fell 1.33 percent, and HudBay Minerals (HBM.TO) inched up 0.11 percent.

Gold futures ended lower, ahead of the outcome from the two-day Federal Reserve policy meet with the dollar trending higher against a select band of currencies.

The Global Gold Index dropped 2.96 percent, with gold for February delivery shedding $5.80 or 0.4 percent, to settle at $1,285.90 on the New York Mercantile Exchange Wednesday.

Among other gold stocks, Yamana Gold Inc. (YRI.TO) fell 3.91 percent, Kinross Gold Corp. (K.TO) dropped 3.02 percent, and Barrick Gold Corp .(ABX.TO) surrendered 2.77 percent.

Goldcorp Inc. (G.TO) slipped 2.52 percent, IAMGOLD (IMG.TO) plummeted 8.59 percent, Eldorado Gold Corp. (ELD.TO) fell 5.01 percent, and Franco-Nevada Corp. (FNV.TO) shed 3.51 percent.

The Capped Materials Index dropped 2.05 percent, mostly on declining gold stocks, with Potash Corp. of Saskatchewan Inc. (POT.TO) adding 0.44 percent and Agrium Inc. (AGU.TO) shedding 0.86 percent.

The heavyweight Financial Index dropped 1.17 percent, as National Bank of Canada (NA.TO) slipped 0.09 percent, Royal Bank of Canada (RY.TO) shed 1.58 percent, Toronto-Dominion Bank (TD.TO) lost 1.99 percent, and Bank of Nova Scotia (BNS.TO) dropped 1.11 percent.

Bank of Montreal (BMO.TO) slipped 1.10 percent, while the Canadian Imperial Bank of Commerce (CM.TO) surrendered 0.91 percent.

The Capped Industrials Index shed 0.99 percent, even as Bombardier Inc. (BBD.B.TO) gained 0.71 percent, and Air Canada (AC.TO) dropped 2.09 percent.

Canadian National Railway Company (CNR.TO) fell 1.34 percent, after reporting fourth-quarter adjusted earnings of C$1.03 per share, topping the consensus estimate of C$0.97 per share. The company's Board has also approved a 25 percent increase in quarterly common-share dividend.

The Information Technology Index fell 2.18 percent, as BlackBerry Limited (BB.TO) fell 3.43 percent, Sierra Wireless (SW.TO) shed 2.08 percent, and Constellation Software (CSU.TO) declined 4.69 percent. Descartes Systems Group Inc. (DSG.TO) gained 2.02 percent,

The Healthcare Index slipped 0.07 percent, as Valeant Pharmaceuticals International, Inc. (VRX.TO) added 0.80 percent and Catamaran Corp. (CCT.TO) dropped 0.41 percent.

The Capped Telecommunication Index dropped 0.31 percent, as Manitoba Telecom Services Inc. (MBT.TO) fell 0.58 percent, Rogers Communications Inc. (RCI.B.TO) fell 0.34 percent, and TELUS Corp. (T.TO) surrendered 0.63 percent.

Webtech Wireless (WEW.TO) gained 0.58 percent. The company announced entering into a C$2.3 million contract with the Maryland State Highway Administration.

AlarmForce Industries (AF.TO) tanked 7.17 percent, after reporting a fourth quarter profit of C$0.17 per share, down from C$0.21 per share last year.

On the economic front, China's consumer sentiment decreased marginally in January, a survey by MNI and Westpac showed Wednesday. The Westpac-MNI consumer sentiment index edged down to 112.1 in January from 112.5 in December.

Germany's consumer confidence improved strongly to a 13-year high at the start of the year, as a collapse in energy prices boosted disposable income and raised room for more spending, survey data from the GfK showed Wednesday. The forward-looking consumer confidence index rose more-than-expected to 9.3 in February from 9.0 in January. This was the highest since November 2001, when the score was at 9.6. The February reading was expected to rise marginally to 9.1.

Germany's import prices declined at a faster-than-expected pace in December, data from the statistical office Destatis showed Wednesday. The import price index fell 3.7 percent year-on-year in December, faster than November's 2.1 percent decline. Economists had forecast a 3.4 percent decrease for the month.

The German government also lifted its growth projections for 2015, citing robust consumer spending. The economy ministry expects the economy to expand 1.5 percent this year, up from the prior estimate of 1.3 percent. Gross domestic product was up 1.5 percent in 2014.

France's consumer confidence remained stable in January, defying expectations for a rise, data from statistical office INSEE showed Wednesday. The consumer confidence index came in at 90 in January, the same as in December. This was less than the 91 score expected by economists. Unemployment hit a record high in December, data from the Labour Ministry showed Tuesday. The number of unemployed people rose 0.2 percent or by 8,100 over the previous month to 3,496,400 in December.