TSX Ends At 8-Month Low On Energy Stocks -- Canadian Commentary

(RTTNews) - Canadian stocks plunged to end at an eight-month low Tuesday, on heavy selling in the energy sector after the International Energy Agency cut its demand forecast amid mounting worries over growth prospects, which weighed on the crude prices and energy stocks.

Financial, industrial and healthcare stocks also dropped as well, with some gloomy economic news from the eurozone prompting investors to indulge in some heavy selling.

Investors largely shrugged off some fairly buoyant quarterly earnings reports from JP Morgan Chase and the CitiGroup.

U.S. financial giant JP Morgan reported third quarter earnings of US$5.6 billion or US$1.36 share, against a loss of US$380 million or 17 cents a share, in the year ago period.

Citigroup reported adjusted third quarter earnings of $1.15 per share on revenues of $19.6 billion, while analysts had expected earnings of $1.12 per share on revenues of $19.05 billion.

The benchmark S&P/TSX Composite Index closed Friday at 14,036.68, down 190.68 points or 1.34 percent. The index scaled a intraday high of 14,185.21 and a low of 13,977.73.

On Friday, the index closed down 233.24 points or 1.61 percent at 14,227.36, after scaling a intraday high of 14,438.45 and a low of 14,188.75. The index shed 3.8 percent last week.

Crude oil plunged to end sharply lower after the International Energy Agency predicted only a modest rise in global demand in 2015 and on some soft data from the eurozone.

The Energy Index plunged 3.71 percent, with U.S. crude oil futures for November delivery plummeting $3.90 or 4.5 percent to close at $81.84 a barrel on the Nymex Tuesday.

Among energy stocks, Canadian Natural Resources Limited (CNQ.TO) plunged 4.99 percent, Talisman Energy Inc. (TLM.TO) plummeted 8.46 percent, Bankers Petroleum Ltd. (BNK.TO) dived 5.66 percent.

Suncor Energy Inc. (SU.TO) dropped 1.53 percent, Enbridge Inc. (ENB.TO) fell 3.32 percent, and Encana Corp. (ECA.TO) plunged 6.58 percent.

The Financial Index dived 1.08 percent, with Toronto-Dominion Bank (TD.TO) dropping 1.24 percent, Canadian Imperial Bank of Commerce (CM.TO) down 1.26 percent, Bank of Nova Scotia (BNS.TO) shed 1.13 percent, Bank of Montreal (BMO.TO) down 0.99 percent, and National Bank of Canada (NA.TO) down 1.05 percent.

Royal Bank of Canada (RY.TO) dropped 1.07 percent, with a Delaware Chancery Court judge directed the bank to pay stockholders of Rural/Metro Corp. a sum of $75.8 million representing 83 percent of the total damages that the class suffered.

Gold futures ended higher as investors sought the safe haven of the precious metal on concerns over the global economic scenario, notwithstanding a strong dollar.

The Global Gold Index jumped 3.67 percent, with gold for December delivery gaining $4.30 or 0.3 percent to settle at $1,234.30 an ounce on the New York Mercantile Exchange Tuesday.

Among gold stocks, Barrick Gold Corp. (ABX.TO) gained 2.25 percent, Yamana Gold Inc. (YRI.TO) added 2.99 percent, Eldorado Gold Corp. (ELD.TO) moved up 2.82 percent, and Goldcorp Inc. (G.TO) gained 2.84 percent.

The Capped Materials Index gained 2.00 percent with Potash Corp. of Saskatchewan Inc. (POT.TO) adding 3.11 percent.

The Diversified Metals & Mining Index added 0.39 percent, as First Quantum Minerals Ltd. (FM.TO) gained 1.13 percent, Lundin Mining Corp. (LUN.TO) moved up 1.20 percent, and Teck Resources Limited (TCK.B.TO) gathered 1.44 percent.

The Capped Industrials Index fell 0.79 percent, with Bombardier Inc. (BBD.B.TO) gaining 2.27 percent, Canadian Pacific Railway Limited (CP.TO) up 0.39 percent and Canadian National Railway (CNR.TO) down 2.09 percent.

The Information Technology Index shed 0.65 percent, with smartphone maker BlackBerry Limited (BB.TO) dropping 1.76 percent.

The Healthcare Index dropped 0.54 percent, with Valeant Pharmaceuticals International, Inc. (VRX.TO) shedding 2.13 percent.

The Telecom Index lost 0.73 percent with Rogers Communications Inc. (RCI.B.TO) surrendering 1.47 percent, BCE Inc. (BCE.TO) inched up 0.13 percent, and TELUS Corp. (T.TO) down 1.04 percent.

In economic news from the eurozone, German investor sentiment declined for a tenth successive month in October to enter the negative territory for the first time in nearly two years. The ZEW Indicator of Economic Sentiment dropped to -3.6 from 6.9 in September, far worse than the zero reading forecast by economists.

Data from Eurostat showed that the decline in eurozone industrial production for August was worse-than-expected. Eurozone industrial production declined 1.8 percent month-on-month, a more severe decline than the 1.6 percent fall predicted by economists.

Meanwhile, Germany's economy ministry today cut its growth forecasts for this year and next, citing weaker demand in export markets due to rising geopolitical tensions and sluggish global growth. The growth forecast for this year was slashed to 1.2 percent from 1.8 percent predicted in April. The outlook for 2014 was reduced to 1.3 percent from a projection of 2 percent earlier.

U.K. inflation slowed to a five-year low in September, giving more space for the Bank of England to delay its first rate hike. Consumer price inflation eased more-than-expected to 1.2 percent in September from 1.5 percent in August, data from the Office for National Statistics showed Tuesday. This was the lowest rate since October 2009. Economists had forecast the rate to slow marginally to 1.4 percent.

Fed Reserve Vice Chairman Stanley Fischer says the weaker-than-expected global growth may delay the pace of eventual interest-rate increases.

"If foreign growth is weaker than anticipated, the consequences for the U.S. economy could lead the Fed to remove accommodation more slowly than otherwise," Fischer said yesterday to the IMF and World Bank in Washington.