TSX Ends Higher As Energy Stocks Soar -- Canadian Commentary

(RTTNews) - Canadian stocks ended sharply higher on Tuesday, led by gains in the energy sector, on the back of a lucrative buyout of Talisman Energy by Repsol SA.

Investors largely ignored some weak economic data from the U.S. and China, while awaiting the outcome of the U.S. Federal Reserve's monetary policy meeting that will conclude on Wednesday, for cues on U.S. interest rate hikes.

In some weak economic data, Chinese manufacturing activity in December with the HSBC Markit's flash PMI index falling to 49.9.

Meanwhile, new residential construction in the U.S. declined in November, with the pullback in housing starts reflecting a notable drop in single-family starts, a Commerce Department report showed Tuesday.

The benchmark S&P/TSX Composite Index closed Monday at 13,861.52, up 156.38 points or 1.14 percent. The index scaled an intraday high of 14,056.85 and a low of 13,670.78.

On Monday, the index ended at 13,705.14, down 25.91 points or 0.19 percent, after scaling an intraday high of 13,852.14 and a low of 13,635.53.

Crude oil ended a tad higher as the dollar weakened against a basket of major currencies on some soft data from the U.S. and China, with the official weekly oil report from the Energy Information Administration due tomorrow.

The Energy Index soared 5.90 percent, with U.S. crude oil futures for January delivery inching up $0.02 to close at $55.93 a barrel a barrel on the Nymex Tuesday.

Talisman Energy Inc. (TLM.TO) surged 48.07 percent, after the company entered into a definitive agreement to be acquired by Spanish oil major Repsol S.A. (REPYY.PK) for a total transaction value of about $13 billion, including Talisman's debt. Talisman shareholders will receive $8, or C$9.33, in cash for each share they own -- a 60 percent premium to Talisman's 30-day weighted average price.

Encana Corp. (ECA.TO) jumped 7.39 percent after announcing a budget of US$2.7 billion - US$2.9 billion in capital spend next year, targeting four areas - two in Western Canada and two in the southern United States.

Meanwhile, Ecopetrol S.A. (ECP.TO) inched up 0.23 percent, after announcing a board approval for an investment plan of US$7.86 billion in 2015.

Among other energy stocks, Husky Energy (HSE.TO) gained 6.09 percent, Western Energy Services Corp. (WRG.TO) gained 4.76 percent, Canadian Natural Resources Limited (CNQ.TO) added 2.10 percent, Pacific Rubiales Energy Corp. (PRE.TO) soared 7.93 percent, and Suncor Energy Inc. (SU.TO) advanced 5.23 percent.

Cenovus Energy Inc. (CVE.TO) added 3.01 percent, Imperial Oil Limited (IMO.TO) gathered 2.69 percent, Crescent Point Energy Corp. (CPG.TO) surged 10.03 percent, and Enbridge Inc. (ENB.TO) moved up 0.29 percent.

Gold futures ended lower with investors focused on the U.S. Federal Reserve's monetary policy outcome on Wednesday.

The Global Gold Index shed 1.78 percent, with gold for February delivery dropping $13.40 or 1.1 percent to settle at $1,194.30 an ounce on the New York Mercantile Exchange Tuesday.

In the gold space, Barrick Gold Corp. (ABX.TO) slipped 1.56 percent, Agnico Eagle Mines Limited (AEM.TO) fell 1.93 percent, Goldcorp Inc. (G.TO) fell 2.21 percent, Eldorado Gold Corp. (ELD.TO) added 0.60 percent, and Franco-Nevada Corp. (FNV.TO) surrendered 0.52 percent.

The Capped Materials Index fell 1.18 percent, mostly on sharply rising gold stocks, even as Potash Corp. of Saskatchewan Inc. (POT.TO) dropped 0.95 percent.

The heavyweight Financial Index gained 0.78 percent, as Bank of Nova Scotia (BNS.TO) gained 0.75 percent, National Bank of Canada (NA.TO) added 0.68 percent, and Toronto-Dominion Bank (TD.TO) advanced 0.81 percent.

Royal Bank of Canada (RY.TO) gained 1.29 percent, while Bank of Montreal (BMO.TO) added 0.49 percent. Canadian Imperial Bank of Commerce (CM.TO) gathered 0.91 percent.

Meanwhile, Fairfax Financial Holdings (FFH.TO) slipped 0.49 percent. Fairfax Financial Holdings said it has entered into an agreement with QBE Insurance (Europe) Limited to acquire QBE's insurance operations in the Czech Republic, Hungary and Slovakia.

The Healthcare Index dropped 0.53 percent, with Valeant Pharmaceuticals International, Inc. (VRX.TO) declining 1.10 percent, Catamaran Corp. (CCT.TO) shed 0.44 percent, and Extendicare Inc. (EXE.TO) up 0.16 percent.

The Diversified Metals & Mining Index dropped 0.81 percent, as Teck Resources Limited (TCK.B.TO) added 0.54 percent, First Quantum Minerals Ltd. (FM.TO) dropped 4.70 percent, and Finning International Inc. (FTT.TO) added 1.99 percent.

Lundin Mining Corp. (LUN.TO) gained 0.80 percent, while Sherritt International Corp. (S.TO) added 3.65 percent.

The Capped Industrials Index gained 1.57 percent, even as Bombardier Inc. (BBD.B.TO) shed 1.76 percent, Canadian National Railway Company (CNR.TO) gained 2.74 percent, and Air Canada (AC.TO) dipped 3.71 percent.

The Information Technology Index gathered 0.45 percent, with BlackBerry Ltd. (BB.TO) edging up 0.18 percent, Descartes Systems Group Inc. (DSG.TO) down 0.35 percent, and Avigilon Corp. (AVO.TO) gained 1.36 percent.

The Capped Telecommunication Index added 1.17 percent, as BCE Inc. (BCE.TO) gained 1.14 percent, Rogers Communications Inc. (RCI.B.TO) added 0.81 percent, and TELUS Corp. (T.TO) gathered 1.80 percent.

In economic news from Canada, manufacturing sales dropped 0.6 percent to $52.7 billion in October, but better than economists forecast of 0.4 percent.

In economic news from the U.S., new residential construction decreased in November, a report from the Commerce Department said Tuesday. Housing starts fell 1.6 percent to a seasonally adjusted annual rate of 1.028 million in November from the revised October estimate of 1.045 million. Economists expected housing starts to climb to a rate of 1.038 million from the 1.009 million originally reported for the previous month.

In Asia, the results of a survey by Markit and HSBC showed manufacturing activity in China contracted in December, with the flash manufacturing purchasing managers' index dropping to 49.5 from 50 in November.

From the eurozone, results from a survey by Markit Economics showed eurozone private sector to have expanded slightly more-than-expected in December, with the composite output advancing to 51.7.

However, activity growth in Germany slowed to an 18-month low due to lesser order intakes and recent airline and rail strikes. At the same time, the French private sector contracted at a slower pace in December.

Meanwhile, eurozone's merchandise trade surplus in October grew from a year ago, data from Eurostat showed Tuesday. The unadjusted trade surplus increased to EUR 24 billion from EUR 16.5 billion in the same month last year. The September trade surplus had grown to $18.1 billion from $10.9 billion a year ago.

Germany's economic confidence rose to the highest level since May 2014, with the indicator of economic sentiment rising 23.4 points to 34.9 in December. This was the second consecutive rise and was at its highest since May 2014.

Elsewhere in Europe, U.K. inflation slowed more-than-expected to a 12-year low in November as the decline in oil prices dragged transport costs and food prices lower. Inflation eased to 1 percent in November, the lowest since September 2002, from 1.3 percent in October, the Office for National Statistics said Tuesday. Economists had forecast inflation to fall marginally to 1.2 percent.

House prices growth in the U.K. quickened less than expected in October, the Office for National Statistics said Tuesday. House prices grew 10.4 percent year-on-year in October following the 12.1 percent rise in the previous month. Economists expected prices to advance 11.4 percent. House prices in England climbed 10.8 percent in October.