Canadian Stocks Are Climbing After China Cut Rates -- Canadian Commentary

(RTTNews) - The Canadian stock market is up in early trade Friday, extending its gains from the previous session. Central banks continue to be the driving force behind recent market moves. While yesterday's rally was sparked by the prospect of further stimulus measures by the ECB, today's gains were triggered by an unexpected rate cut in China.

China's central bank unexpectedly lowered interest rates and reserve ratio on Friday, in what could be the latest stimulus effort to underpin the economy that is adjusting itself to the 'new normal' of lower growth. The People's Bank of China cut the one-year lending rate and deposit rate by a quarter-point to 4.35 percent and 1.50 percent, respectively. The latest reduction was the sixth since November last year.

The move comes a day after the European Central Bank hinted that further stimulus is coming in December. Policy makers in the U.S. and Canada are also hinting that rates will stay extraordinarily low for some time.

Markets in Europe extended gains for a second day Friday on expectations the European Central Bank (ECB) would expand its €1.1 trillion asset-purchase program as soon as December to tackle the threat of weak inflation.

Markets in the United States are also climbing in early trade, following yesterday's rally. The markets are also benefitting from a positive reaction to earnings reports from tech giants Microsoft, Amazon.com and Alphabet, the parent company of Google.

The benchmark S&P/TSX Composite Index is up 111.35 points or 0.80 percent at 13,989.46.

On Thursday, the index closed up 173.92 points or 1.27 percent, at 13,878.11. The index scaled an intraday high of 13,888.50 and a low of 13,730.66.

The Diversified Metal and Mining Index is advancing 2.57 percent. First Quantum Minerals (FM.TO) is up 3.88 percent and HudBay Mineral (HBM.TO) is increasing 0.60 percent. Lundin Mining (LUN.TO) is gaining 1.71 percent and Sherritt International (S.TO) is adding 1.08 percent. Capstone Mining (CS.TO) is rising 1.64 percent.

The Capped Health Care Index is climbing 1.44 percent, as it attempts to recover from 2 days of heavy losses. Concordia Healthcare (CXR.TO) is gaining 8.03 percent and Valeant Pharmaceuticals International (VRX.TO) is rising 6.25 percent.

The Capped Materials Index is up 1.39 percent. Franco-Nevada (FNV.TO) is higher by 0.38 percent and Silver Wheaton (SLW.TO) is rising 1.92 percent. Agrium (AGU.TO) is gaining 1.86 percent and Potash Corp. of Saskatchewan (POT.TO) is advancing 3.26 percent.

The Gold Index is increasing by 1.08 percent. Gold prices were up in early trade Friday, but have since turned lower.

Kinross Gold (K.TO) is gaining 0.68 percent and Yamana Gold (YRI.TO) is rising 1.56 percent. Goldcorp (G.TO) is advancing 1.26 percent and Eldorado Gold (ELD.TO) is adding 1.75 percent. Barrick Gold (ABX.TO) is up 0.90 percent and IAMGOLD (IMG.TO) is increasing by 2.66 percent.

The heavyweight Financial Index is rising 0.96 percent. Toronto-Dominion Bank (TD.TO) is up 0.67 percent and Canadian Imperial Bank of Commerce (CM.TO) is adding 0.71 percent. Royal Bank of Canada (RY.TO) is climbing 0.98 percent and National Bank of Canada (NA.TO) is advancing 0.61 percent.

Bank of Nova Scotia (BNS.TO) is higher by 0.73 percent. The Globe and Mail reports that the company will close some regional offices and cut jobs.

Bank of Montreal (BMO.TO) is rising 0.70 percent. The company announced that it will relocate its Atlantic Canada headquarters and support services, its main BMO Bank of Montreal and BMO Nesbitt Burns branches, as well as BMO Private Banking, Commercial and Corporate Finance offices to the new Nova Centre.

Sun Life Financial (SLF.TO) is gaining 1.05 percent, after it launched the Stop-Loss Benchmark nationwide.

The Capped Information Technology Index is gaining 0.85 percent. Constellation Software (CSU.TO) is rising 0.58 percent and Avigilon (AVO.TO) is adding 4.22 percent. BlackBerry (BB.TO) is climbing 1.07 percent and Sierra Wireless (SW.TO) is up 5.46 percent.

The Capped Industrials Index is up 0.63 percent. Canadian National Railway (CNR.TO) is higher by 0.47 percent and Air Canada (AC.TO) is climbing 1.94 percent. AutoCanada (ACQ.TO) is gaining 3.03 percent and Finning International (FTT.TO) is rising 3.13 percent. CAE (CAE.TO) is increasing 1.48 percent.

The Capped Telecommunication Services Index is higher by 0.40 percent. BCE (BCE.TO) is up 0.08 percent and TELUS (T.TO) is advancing 0.29 percent. Rogers Communication (RCI-A.TO) is gaining 0.94 percent and Manitoba Telecom Services (MBT.TO) is adding 0.28 percent.

The Energy Index is decreasing 0.11 percent. Crude oil prices have turned slightly lower this morning, reversing early gains.

Canadian Oil Sands (COS.TO) is losing 1.24 percent and Suncor (SU.TO) is down 1.10 percent. Canadian Natural Resources (CNQ.TO) is dipping 0.29 percent.

Thomson Reuters (TRI.TO) is falling 1.30 percent after it re-affirmed its full-year business outlook for 2015. For the third-quarter, adjusted earnings per share was $0.52, beating estimates.

On the economic front, data from Statistics Canada showed that consumer prices rose 1.0 percent on an annual basis in September, following 1.3 percent rise last month. This was also lower than the expected 1.1 percent growth.

Core consumer prices grew 2.1 percent on year, same as last month. Economists had expected an inflation rate of 2.2 percent.

The consumer prices fell 0.2 percent on month, steeper than expectations for a decline of 0.1 percent. The inflation was flat in August.

On a monthly basis, the Bank of Canada's core consumer price index rose 0.2 percent, matching August's estimate. The reading was slower than forecasts for a 0.3 percent gain.

Eurozone's private sector grew at the fastest pace in two months during October, led by stronger service sector expansion, yet the surprise improvement is unlikely to cause any change in the European Central Bank's possible plans to boost stimulus in December, as strongly hinted by Mario Draghi a day earlier.

The flash composite purchasing managers' index that represents both manufacturing and services rose to a two-month high of 54.0 from 53.6 in September. Economists had expected a score of 53.4.

Germany's factory sector growth slowed more-than-expected in October, while services activity unexpectedly revealed strong growth that was the fastest in seven months, preliminary data from a Markit Economics survey showed Friday.

The flash purchasing managers' index for the manufacturing sector fell to a five-month low of 51.6 from 52.3 in September. The reading was expected to ease to 51.7.

The total value of new orders received by the German construction industry increased in August, figures from Destatis showed Friday. Orders in the main construction industry climbed a seasonally and working-day-adjusted 0.4 percent month-over-month in August.

France's private sector expanded at the fastest pace in four months during October, as services activity improved more than manufacturing, preliminary data from a Markit Economics survey showed Friday.

The flash purchasing managers' index for the services sector rose to 52.3 from 51.9 in September, marking the highest level in four months. In contrast, economists had expected a modest decline in the index to 51.7.

In commodities, crude oil futures for November delivery are down $0.90 or 1.98 percent at $44.48 a barrel.

Natural gas for November is down 0.062 or 2.60 percent at $2.324 per million btu.

Gold futures for December are down $4.50 or 0.39 percent at $1,161.60 an ounce.

Silver for December is down $0.067 or 0.42 percent at $15.77 an ounce.