TSX Ends Sharply Lower On Weak Commodity -- Canadian Commentary

(RTTNews) - Canadian stocks dropped sharply to end at a near seven-month low on Friday, dragged down by resource stocks on weak commodity prices and as well on data showing an unexpected surge in the country's core inflation .

Canada's annual core inflation rate rose more than expected to 2.1 percent in August from 1.7 percent in July, which excludes some eight volatile items. The total consumer price index rose at a 2.1 percent rate for a second month, in line with estimates.

On monthly basis, core price inflation was up a seasonally adjusted 0.5 percent, from minus 0.1 percent in July.

Besides resources stocks, financial and consumer discretionary stocks are also notably lower.

The S&P/TSX Composite Index closed Friday at 15,266.40, down 199.14 points or 1.29 percent. The index scaled a intraday high of 15,461.26 and a low of 15,238.00.

On Thursday, the index closed up 6.66 points or 0.04 percent at 15,465.54, after scaling a intraday high of 15,477.02 and a low of 15,422.47.

Crude oil settled lower as the dollar strengthened against some major currencies with continued demand growth concerns amid fears of a supply glut.

The Energy Index dived 1.87 percent, with U.S. crude oil futures for October delivery dropping $0.66 or 0.7 percent to close at $92.41 a barrel Friday on the Nymex.

Among energy stocks, Cenovus Energy Inc. (CVE.TO) dropped 1.20 percent, Suncor Energy Inc. (SU.TO) fell 2.46 percent, Encana Corp. (ECA.TO) fell 2.54 percent, and Canadian Natural Resources Limited (CNQ.TO) shed 2.31 percent. Bucking the trend, Enbridge Inc. (ENB.TO) gained 2.32 percent.

The Financial Index lost 1.24 percent, with Toronto-Dominion Bank (TD.TO) falling 1.74 percent, Canadian Imperial Bank of Commerce (CM.TO) down 0.87 percent, Royal Bank of Canada (RY.TO) surrendered 1.58 percent, Bank of Nova Scotia (BNS.TO) dropped 1.89 percent, and Bank of Montreal (BMO.TO) dived 1.21 percent.

Manulife Financial Corp. (MFC.TO) shed 1.21 percent, while Sun Life Financial Inc. (SLF.TO) slipped 0.38 percent.

Gold ended lower with the dollar strengthening against some select currencies amid continued speculation that U.S. interest rates will rise at a faster pace once monetary tightening begins.

Global Gold Index dropped 2.31 percent, with gold for December delivery shedding $10.30 percent or 0.8 percent to settle at $1,216.60 an ounce on the New York Mercantile Exchange Friday.

Among gold stocks, Goldcorp Inc. (G.TO) dropped 2.70 percent, Yamana Gold Inc. (YRI.TO) declined 3.64 percent, Eldorado Gold Corp. (ELD.TO) dropped 4.66 percent, and Barrick Gold Corp. (ABX.TO) surrendered 2.40 percent.

The Capped Materials Index fell 2.38 percent mostly on sharply declining gold stocks, even as Potash Corp. of Saskatchewan Inc. (POT.TO) inched up 0.10 percent.

The Diversified Metals & Mining Index plummeted 4.03 percent, with First Quantum Minerals Ltd. (FM.TO) sharply down 4.00 percent, Lundin Mining Corp. (LUN.TO) down 3.65 percent, and Teck Resources Limited (TCK.B.TO) plunging 5.80 percent.

The Capped Industrial Index dropped 0.84 percent, with Bombardier Inc. (BBD.B.TO) down 2.77 percent and Air Canada (AC.B.TO) down 1.78 percent.

The Information Technology Index fell 1.56 percent, with BlackBerry Limited (BB.TO) up 0.93 percent.

The Consumer Staples Index shed 1.15 percent, with Alimentation Couche-Tard Inc. (ATD.B.TO) down 3.40 percent.

The Healthcare Index surrendered 1.23 percent, with Valeant Pharmaceuticals International, Inc. (VRX.TO) down 1.20 percent, Extendicare Inc. (EXE.TO) down 1.18 percent and Catamaran Corp. (CCT.TO) slipping 1.94 percent.

The Telecom Index dived 1.37 percent with Rogers Communications Inc. (RCI.B.TO) dropping 1.99 percent and TELUS Corp. (T.TO) down 0.33 percent. Telus Corp. (T.TO) said its stores across Canada will now be selling the new iPhone 6 and iPhone 6 Plus models.

TransCanada Corp. (TRP.TO) shares are up 0.94 percent after the company said it will sell the rest of its U.S. natural gas pipeline assets to TC PipeLines, LP (TCP) over the coming years. These assets are expected to generate nearly $500 million in earnings before interest, tax, depreciation and amortization in 2016 and beyond.

Cervus Equipment Corp. (CVL.TO) inched up 0.05 percent after it agreed to buy 100 percent of the shares of Evergreen Equipment Ltd.

Algonquin Power & Utilities Corp. (AQN.TO) gained 1.35 percent. The company announced that Liberty Utilities has entered into an agreement with Western Water Holdings to acquire the regulated water distribution utility Park Water Company for a consideration of approximately US$327 million.

On the economic front, data from Statistics Canada showed annual core inflation to have risen more than expected to 2.1 percent in August, the highest level since April 2012, from 1.7 percent in July. On monthly basis, core price inflation was up a seasonally adjusted 0.5 percent, from minus 0.1 percent in July.

The overall consumer price index rose at a annual rate of 2.1 percent in August, unchanged from previous month.

According to another report from Statistics Canada, wholesale sales were down to a seasonally adjusted -0.3 percent in August, after recording an increase of 0.8 percent in the previous month.

From the U.S., a Conference Board report on Friday showed a continued increase by its index of leading U.S. economic indicators in August, although the pace of growth slowdown significantly compared to the previous month.

The leading economic index edged up by 0.2 percent in August after showing upwardly revised increases of 1.1 percent and 0.7 percent in July and June, respectively. Economists expected the index to climb by 0.4 percent compared to the 0.9 percent increase originally reported for July.

Eurozone's current account surplus was largely unchanged from the previous month in July, data from the European Central Bank showed Friday. The current account surplus rose slightly to EUR 18.7 billion from EUR 18.6 billion in June.

Meanwhile, fears about the economic impact from a possible splintering of the U.K. have receded following Scotland opting to stay with the U.K. According to reports, Scotland voted 55 percent to 45 percent against breaking away from the United Kingdom.