TSX Ends Sharply Lower On Global Cues - Canadian Commentary

(RTTNews) - Canadian stocks ended sharply lower on Friday, tracking declining global equity markets, led predominantly by resource stocks with investors continuing to mull over the U.S. Federal Reserve's surprising decision not to scale down its $85 billion monthly bond-buying program. Also in focus was the possibility of the Federal Reserve tapering down its quantitative easing program after its October meeting.

Investors weighed prospects of a possible scale down to the Fed's stimulus program in October, after St. Louis Fed President James Bullard indicated the central bank could scale down its asset purchase program at its next meeting if the economy showed significant signs of recovery, with focus on jobs.

The Federal Reserve on Wednesday decided against tapering its massive bond-buying program, which has been in place since September last. The Federal Open Market Committee opted to continue its support program after a disappointing August jobs report that raised concerns about the pace of U.S. economic recovery.

The S&P/TSX Composite Index closed Thursday at 12,807.05, down 119.73 points or 0.93 percent. The index touched an intraday high of 12,942.70 and a low of 12,807.05.

The Information Technology Index dropped 3.33 percent, with BlackBerry Limited (BB.TO) plummeting 16.08 percent. The smartphone maker said revenues for its recently ended second quarter is expected to come in well below expectations, with sales of its latest smartphones plunging. The company also confirmed layoffs of about 4,500 workers, aiming to reduce operating expenses by at least 50 percent by the end of 2015 fiscal year. BlackBerry also indicated plans to cut its future device portfolio from six handsets to four.

The Diversified Metals & Mining Index dropped 2.63 percent, with First Quantum Minerals Ltd. (FM.TO) down 2.27 percent, while Osisko Mining Corp. (OSK.TO) dropping 2.70 percent. Teck Resources Limited (TCK.B.TO) dipped 3.48 percent and Lundin Mining Corp. (LUN.TO) shed 1.25 percent.

The Capped Materials Index shed 3.58 percent, with Potash Corporation of Saskatchewan Inc.(POT.TO) adding 0.73 percent.

Gold futures plunged to end sharply lower Friday, mostly on profit taking after gaining a near five percent yesterday on the Federal Reserve's decision to refrain from scaling down its $85 billion monthly bond-buying program earlier in the week.

The Global Gold Index lost 5.45 percent, with gold futures for December delivery plunging plummeted $36.80 or 2.7 percent to close at $1,369.30 an ounce Friday on the Nymex.

Among gold stocks, Barrick Gold Corp. (ABX.TO) shed 4.16 percent, while Yamana Gold Inc. (YRI.TO) plunged 6.53 percent. B2Gold Corp. (BTO.TO) plunged 6.92 percent, while Goldcorp Inc. (G.TO) dropped 3.78 percent. Kinross Gold Corporation (K.TO) slumped 7.22 percent, while Eldorado Gold Corporation (ELD.TO) dived 7.74 percent.

U.S. crude oil plunged to end at a one-month low Friday, on easing supply concerns over Syria and some thawing in relations with Iran, even as Libyan crude production is expected to be normalized soon. Investors also weighed prospects of the Federal Reserve possibly scaling down its $85 billion bond-buying program after its October meeting.

The Energy Index shed 0.38 percent, with U.S. crude oil futures for October delivery plummeting $$1.72 or 1.6 percent to close at $104.67 a barrel Friday on the Nymex.

Among energy stocks, Canadian Natural Resources Limited (CNQ.TO) lost 0.40 percent, Talisman Energy Inc. (TLM.TO) dropped 1.30 percent, and Suncor Energy Inc.(SU.TO) shed 0.59 percent. Enbridge Inc. (ENB.TO) fell 0.48 percent, while Imperial Oil Limited (IMO.TO) surrendered 0.74 percent.

The Financial Index slipped 0.27 percent with Bank of Montreal (BMO.TO) up 0.30 percent and Manulife Financial Corp. (MFC.TO) down 0.76 percent. The Bank of Nova Scotia (BNS.TO) dropped 0.70 percent, while Toronto-Dominion Bank (TD.TO) ended flat at $91.05 per share. Royal Bank of Canada (RY.TO) dropped 0.36 percent, while National Bank of Canada (NA.TO) dipped 0.65 percent.

The Capped Industrials Index shed 0.81 percent, with Bombardier Inc. (BBD.A.TO, BBD.B.TO) down 0.63 percent.

In economic news, the U.K. budget deficit narrowed slightly more than expected in August, suggesting that economic recovery started to usher in positive developments in public finances. Data from the Office for National Statistics on Friday showed public sector net borrowing, excluding temporary effects of financial interventions, at GBP 13.2 billion-- which is below the GBP 14.4 billion borrowing seen during the same period of last year. The deficit was expected to decline to GBP 13.3 billion.

Meanwhile, International Monetary Fund Chief Christine Lagarde said global economic growth remains subdued despite signs of recovery in the U.S., emphasizing that economies are moving at different speeds. The stake of U.S. in the global recovery is greater than ever in a world of increasing economic interconnections, Lagarde said in a speech to business leaders at the U.S. Chamber of Commerce in Washington, D.C on Thursday.

Ahead of the release of the next World Economic Outlook on October 8, Lagarde underscored the interplay between the global economy and the U.S. economy and the importance of job creation.