Energy Weakness Has Pushed Canadian Stocks Into The Red -- Canadian Commentary

(RTTNews) - The Canadian stock market was up slightly in early trade Tuesday, but has slipped into negative territory. Mining and healthcare stocks are among the best performing stocks this morning, but weakness in the energy sector has dragged the market lower.

Investors remain cautious after the global sell-off in equities yesterday. Chinese authorities have announced measures to support investor sentiment, including a liquidity boost by the central bank and more steps to regularize stock selling by major shareholders, after stock markets endured a massive sell-off Monday. The People's Bank of China on Tuesday pumped $19.94 billion or 130 billion yuan in its 7-day reverse repurchase operation, the biggest such injection since September.

The Chinese stock market sank 7 percent on Monday, which led to a suspension of trade after its new "circuit breaker" was triggered on its very first day. The rout spread to the global markets.

The European markets are turning in a mixed performance Tuesday. The markets are having trouble deciding on a direction due to continued concerns over China.

Markets in the United States have dipped into negative territory this morning, due to ongoing concerns about the global economy. A lack of major U.S. economic data also seems to be keeping some traders on the sidelines.

The benchmark S&P/TSX Composite Index is down 25.99 points or 0.20 percent at 12,901.16.

On Monday, the index closed down 82.80 points or 0.64 percent, at 12,927.15. The index scaled an intraday high of 12,928.90 and a low of 12,748.45.

The Energy Index is decreasing 1.20 percent. Crude oil prices were lower Tuesday morning ahead of data showing whether U.S. oil stockpiles continued to rise in the final week of 2015.

Crescent Point Energy (CPG.TO) is falling 2.10 percent and Cenovus Energy (CVE.TO) is down 1.67 percent. Canadian Natural Resources is dipping 0.57 percent and Enbridge (ENB.TO) is losing 1.33 percent. Pacific Exploration & Production (PRE.TO) is lower by 1.75 percent and Husky Energy (HSE.TO) is slipping 0.21 percent. Imperial Oil (IMO.TO) is declining 1.20 percent.

Suncor Energy (SU.TO) is decreasing 1.70 percent and Canadian Oil Sands (COS.TO) is climbing 1.39 percent. Canadian Oil Sands shareholder Seymour Schulich sent a letter to fellow shareholders, urging them to reject Suncor Energy's hostile bid.

The Capped Industrials Index is lower by 0.84 percent. CAE (CAE.TO) is falling 0.20 percent and AutoCanada (ACQ.TO) is losing 2.36 percent. Canadian Pacific Railway (CP.TO) is decreasing 1.20 percent and Canadian National Railway (CNR.TO) is surrendering 1.77 percent. Finning International (FTT.TO) is down 1.96 percent.

The Capped Materials Index is down 0.64 percent. Franco-Nevada (FNV.TO) is falling 0.66 percent and Silver Wheaton (SLW.TO) is weakening by 1.64 percent. Agrium (AGU.TO) is lower by 1.20 percent and Potash Corp. of Saskatchewan (POT.TO) is sinking 2.77 percent. Analysts at Bank of Nova Scotia who spoke to Bloomberg feel that Potash should acquire Intrepid Potash Inc. after failing in its bid last year for Germany's K+S AG.

The heavyweight Financial Index is falling 0.29 percent. Royal Bank of Canada (RY.TO) is decreasing 0.33 percent and Toronto-Dominion Bank (TD.TO) is down 0.41 percent. Bank of Montreal (BMO.TO) is lower by 0.38 percent and Canadian Imperial Bank of Commerce (CM.TO) is losing 0.27 percent.

The Gold Index is dipping 0.15 percent. Gold prices are higher for a second day Tuesday morning, as traders expressed anxiety over the outlook for the global economy in 2016.

Barrick Gold (ABX.TO) is declining 0.46 percent and Eldorado Gold (ELD.TO) is falling 0.93 percent. Goldcorp (G.TO) is decreasing 1.33 percent and Royal Gold (RGL.TO) is surrendering 1.86 percent.

The Capped Health Care Index is gaining 3.18 percent. Extendicare (EXE.TO) is rising 0.85 percent and Concordia Healthcare (CXR.TO) is climbing 3.29 percent. Valeant Pharmaceuticals International (VRX.TO) is also higher by 5.25 percent.

The Diversified Metal and Mining Index is advancing 1.08 percent. First Quantum Minerals (FM.TO) is rising 1.76 percent and HudBay Minerals (HBM.TO) is gaining 1.47 percent. Capstone Mining (CS.TO) is increasing 1.22 percent and Lundin Mining (LUN.TO) is up 1.32 percent. Sherritt International (S.TO) is higher by 1.35 percent.

The Capped Telecommunication Services Index is gaining 0.27 percent. Manitoba Telecom Services (MBT.TO) is rising 0.53 percent and BCE (BCE.TO) is increasing 0.30 percent. TELUS (T.TO) is adding 0.24 percent.

The Capped Information Technology Index is up 0.22 percent. Descartes Systems Group (DSG.TO) is rising 0.95 percent and Constellation Software (CSU.TO) is higher by 0.33 percent.

On the economic front, Statistics Canada reported this morning that the Canadian industrial product price index declined 0.2 percent in November. This was the fourth consecutive decrease in the index. Economists had expected the index to remain unchanged from October.

Eurozone inflation remained stable at a very low level in December, seeking more actions from the European Central Bank as oil prices, the main source contributing to the weakness, are unlikely to rebound in the near term.

According to flash data from Eurostat on Tuesday, consumer prices advanced 0.2 percent year-on-year in December, the same rate as seen in November, but slower than the 0.4 percent rate economists had forecast.

Germany's unemployment declined more-than-expected in December and the rate held steady at the lowest level since reunification, signaling strength in the labor market despite the huge influx of migrants. The number of people out of work declined again by 14,000 in December compared to an expected drop of 8,000. There were 2.757 million unemployed at the end of the year.

The jobless rate came in at 6.3 percent in December, the same as in November and matched expectations. This was the lowest since the German reunification in 1990.

Germany's unemployment rate remained unchanged in November, labor force survey published by Destatis showed Tuesday. The jobless rate came in at adjusted 4.5 percent, the same rate as seen in October. In the same period last year, the rate was 4.9 percent.

The U.K. construction sector strengthened more than expected in December, survey results from Markit showed Tuesday. The Chartered Institute of Procurement & Supply/Markit Purchasing Managers' Index rose to 57.8 in December from a seven-month low of 55.3 in November. It was forecast to rise moderately to 56.

In commodities, crude oil futures for February delivery are down $0.50 or 1.36 percent at $36.26 a barrel.

Natural gas for February is down 0.061 or 2.61 percent at $2.273 per million btu.

Gold futures for February are up $2.40 or 0.22 percent at $1,077.60 an ounce.

Silver for March is up $0.109 or 0.79 percent at $13.95 an ounce.