TSX Ends Sharply Lower On Concerns Over Global Economy -- Canadian Commentary

(RTTNews) - Canadian stocks ended sharply lower on Tuesday, tracking declining global equity markets on investor concerns over the global economy and the prospects of an earlier interest rate hike by the U.S. Federal Reserve following some upbeat jobs data.

A weak report from eurozone showing a notable drop in Germany's industrial output in August and a downward revision in China's growth outlook by the World Bank also impacted the market.

However, with the minutes of the U.S. Federal Reserve's September policy meeting due tomorrow, the mood is somewhat cautious.

Meanwhile, there has been widespread speculation that the Fed would hike interest rates sooner than later after the U.S. economy showed signs of strength with the better than expected jobs data last week.

The benchmark S&P/TSX Composite Index closed Tuesday at 14,576.45, down 166.67 points or 1.13 percent. The index scaled a intraday high of 14,757.89 and a low of 14,572.18.

On Monday, the index ended lower after having plummeted to a two-year low last week. However, oil prices did rebound as the dollar came off its 4-year highs against a basket of major currencies.

Crude oil rebounded to end higher after having plummeted to a two-year low last week, as the dollar came off its 4-year highs against a basket of major currencies. Nonetheless, the gains were somewhat limited on demand growth concerns.

The Energy Index plunged 1.89 percent, with U.S. crude oil futures for November delivery plummeting $1.49 or 1.6 percent to close at $88.85 on the Nymex Tuesday.

Among energy stocks, Encana Corp. (ECA.TO) fell 0.75 percent, Cenovus Energy Inc. (CVE.TO) shed 0.83 percent, and Canadian Natural Resources Limited (CNQ.TO) surrendered 3.29 percent. Suncor Energy Inc. (SU.TO) dropped 2.58 percent, while Enbridge Inc. (ENB.TO) fell 0.77 percent.

The Financial Index slipped 0.65 percent, with Toronto-Dominion Bank (TD.TO) dropping 0.72 percent, while Canadian Imperial Bank of Commerce (CM.TO) fell 0.35 percent. Royal Bank of Canada (RY.TO) dropped 0.52 percent, Bank of Nova Scotia (BNS.TO) fell 0.51 percent, Bank of Montreal (BMO.TO) shed 0.62 percent, and National Bank of Canada (NA.TO) added 0.02 percent.

Gold futures ended higher ahead of the minutes of the U.S. Federal Reserve September monetary policy meeting due tomorrow, with investors seeking cues as to when the central bank will hike rates.

The Global Gold Index dived 2.95 percent, with gold for December delivery adding $5.10 or 0.4 percent to settle at $1,212.40 an ounce on the New York Mercantile Exchange Tuesday.

Among gold stocks, Barrick Gold Corp. (ABX.TO) dived 3.79 percent, Yamana Gold Inc. (YRI.TO) fell 3.09 percent, and Eldorado Gold Corp. (ELD.TO) dropped 2.94 percent. Goldcorp Inc. (G.TO) fell 2.14 percent, while B2Gold Corp. (BTO.TO) dropped 3.11 percent.

The Capped Materials Index dived 2.12 percent with Potash Corp. of Saskatchewan Inc. (POT.TO) moving up 0.16 percent.

The Diversified Metals & Mining Index plunged 3.36 percent, with First Quantum Minerals Ltd. (FM.TO) diving 4.09 percent, Lundin Mining Corp. (LUN.TO) down 2.06 percent, and Teck Resources Limited (TCK.B.TO) shedding 4.64 percent.

The Capped Industrials Index dived 2.03 percent, with Bombardier Inc. (BBD.B.TO) adding 0.28 percent and SNC-Lavalin Group Inc. (SNC.TO) up 1.03 percent.

The Information Technology Index shed 0.80 percent, with smartphone maker BlackBerry Limited (BB.TO) down 2.92 percent.

The Healthcare Index fell 1.65 percent, with Valeant Pharmaceuticals International, Inc. (VRX.TO) down 2.19 percent. Catamaran Corporation (CCT.TO) dropped 0.62 percent, while Extendicare Inc. (EXE.TO) dropped 2.04 percent.

The Telecom Index slipped 0.26 percent with Rogers Communications Inc. (RCI.B.TO) edging up 0.26 percent and TELUS Corp. (T.TO) edged down 0.05 percent.

CAE Inc. (CAE.TO) gained 1.09 percent after a joint venture agreement with Japan Airlines to provide flight crew training services across Northeast Asia, excluding China.

Cameco Corp. (CCO.TO) shed 3.48 percent after unionized employees at the McArthur River mine and Key Lake mill operations have voted to accept a new collective agreement. The contract provides a 12 percent wage increase per terms of the agreement which expires on December 31, 2017.

DHX Media Ltd. (DHX.TO) fell 1.17 percent as the company announced that it will produce a new preschool series with Ragdoll Productions called Twirlywoos for CBeebies, the children's arm of the BBC. Besides producing the series, DHX will handle the global distribution, merchandising, brand management and marketing jobs as well.

On the economic front, data released by Statistics Canada showed new building permits in Canada to have declined by a much bigger than expected 27.3 percent in August, compared to a revised 11.6 percent increase in the preceding month.

Washington-based International Monetary Fund in its World Economic Outlook slashed global growth projection for this year to 3.3 percent from 3.4 percent predicted in July. The forecast for 2015 was lowered to 3.8 percent from the 4 percent forecast earlier.

On Monday, the World Bank had slashed its growth outlook for China to 7.4 percent this year, from a previous forecast of 7.6 percent.

From Europe, German industrial production declined at the fastest pace since January 2009, falling 4 percent month-on-month in August, underlining that the largest euro area economy is moving further down after contracting in the second quarter.

The British economy revealed a steady pace of expansion in the three months to September, with possibilities the central bank may hike interest rates in the first quarter of 2015, the National Institute of Economic and Social Research said Tuesday. Economic output increased 0.7 percent in the three months ending September after growing 0.8 percent in the three months to August. This indicates the U.K. economy is now 3.1 percent larger than it was in the same period in 2013.

In the second quarter, the U.K. economy grew 0.9 percent sequentially and 3.2 percent annually, according to the Office for National Statistics.

Meanwhile, U.K. industrial production remained unchanged in August as maintenance at North Sea dampened oil and gas extraction. Industrial output remained flat in August from July, when it rose 0.4 percent, the Office for National Statistics reported Tuesday.