TSX Ends Higher Despite Global Markets Sell-Off -- Canadian Commentary

(RTTNews) - Canadian stocks snapped a two-day loss to end a tad higher on Monday, bucking the trend of global equity markets sell-off, amid concerns over a Greece default on its sovereign debt after its talks with international creditors collapsed end last week, raising fears of a fallout for the entire eurozone.

The slight uptick comes as existing home sales in Canada rose in May for a fourth consecutive month-over-month increase.

Markets in Europe ended solidly in negative territory at the start of the new trading week. Greece and its official creditors ended their meeting with no agreement on Sunday. According to media reports, the talks did not succeed, as there remained a significant gap between the plans of the Greek authorities and the demands of the international creditors.

The inability of the two sides to reach a compromise has led to worries about a potential Greek default at the end of the month. A meeting of the European finance ministers scheduled at Luxembourg on Thursday, could be a make-or-break session for Greece.

European Central Bank President Mario Draghi on Monday said both Greece and its creditors need to intensify efforts to reach a strong and comprehensive agreement soon, but it is now the Greek government's turn to respond with necessary steps to reach a solution.

Greek leaders, however, continue to sound defiant with the anti-austerity Prime Minister Alexis Tsipras asking creditors to become 'realistic.' Nevertheless, both sides have hinted talks will continue.

The situation in Greece also weighed on U.S. stocks, with a pair of weaker than expected economic reports contributing to the decline in most markets. U.S. industrial production and the New York Fed manufacturing report both came in weaker than expected, although investors remained apprehensive ahead of the Fed's monetary policy announcement on Wednesday.

The benchmark S&P/TSX Composite Index closed Monday at 14,756.05, down 14.90 points or 0.10 percent. The index scaled an intraday high of 14,784.53 and a low of 14,651.36.

On Friday, the index closed down 89.73 points or 0.61 percent, at 14,741.15. The index scaled an intraday high of 14,798.31 and a low of 14,725.25.

Crude oil futures ended lower on concerns of a supply glut even as the Organization of the Petroleum Exporting Countries continues to raise its output levels and U.S. oil stocks dropping. The cartel aims to push U.S. shale producers out of the market and data suggest the strategy to be gaining some degree of success, with U.S. oil inventories and rig count declining in the last several weeks.

The Energy Index fell 0.84 percent, with U.S. crude oil futures for July delivery, the most actively traded contract, dropping $0.44 or 0.7 percent, to settle at $59.52 a barrel on the New York Mercantile Exchange Monday.

Among energy stocks, Suncor Energy Inc. (SU.TO) fell 1.61 percent, while Crescent Point Energy Corp. (CPG.TO) moved up 0.30 percent. Encana Corp. (ECA.TO) slipped 1.28 percent, and Enbridge Inc. (ENB.TO) inched up 0.14 percent.

Canadian Oil Sands Limited (COS.TO) added 0.71 percent, while Pacific Rubiales Energy Corp. (PRE.TO) shed 2.30 percent.

Cenovus Energy Inc. (CVE.TO) moved up 0.45 percent, while Canadian Natural Resources Limited (CNQ.TO) fell 1.28 percent.

Gold futures closed higher as the dollar trended lower after some weaker than expected economic data from the U.S., with investors seeking the safe haven appeal of the precious metal over concerns of a Greek default on its sovereign debt.

The Gold Index gained 0.51 percent, with gold for August delivery gaining $6.60 or 0.6 percent to settle at $1,185.80 an ounce on the New York Mercantile Exchange Monday.

Among gold stocks, Goldcorp Inc. (G.TO) dropped 0.77 percent, Barrick Gold Corp. (ABX.TO) added 2.09 percent, and Kinross Gold Corp. (K.TO) move up 0.69 percent. IAMGOLD Corp. (IMG.TO) added 0.71 percent, while Eldorado Gold Corp. (ELD.TO) gathered 0.78 percent.

The Capped Materials Index added 0.26 percent, with Agrium Inc. (AGU.TO) gaining 0.20 percent, Agnico Eagle Mines Limited (AEM.TO) moving up 0.74 percent. Franco-Nevada Corp. (FNV.TO) gained 1.19 percent, while Potash Corp. of Saskatchewan Inc. (POT.TO) gathered 0.99 percent.

The Diversified Metals & Mining Index fell 1.22 percent, as First Quantum Minerals Ltd. (FM.TO) dropped 1.43 percent, Lundin Mining Corp. (LUN.TO) slipped 0.18 percent, and Teck Resources (TCK.B.TO) shed 1.72 percent.

The heavyweight Financial Index gained 0.23 percent, as Royal Bank of Canada (RY.TO) inched up 0.05 percent, National Bank of Canada (NA.TO) added 0.66 percent, and Bank of Montreal (BMO.TO) gathered 0.98 percent.

Bank of Nova Scotia (BNS.TO) gathered 0.56 percent, while Toronto-Dominion Bank (TD.TO) moved up 0.39 percent. Canadian Imperial Bank of Commerce (CM.TO) gained 0.21 percent.

The Capped Health Care Index fell 0.64 percent as Valeant Pharmaceuticals International (VRX.TO) moved up 0.64 percent, Extendicare Inc. (EXE.TO) added 0.70 percent, and Concordia Healthcare Corp. (CXR.TO) surrendered 1.94 percent.

The Capped Industrials Index edged down 0.16 percent, with Finning International Inc. (FTT.TO) shedding 2.40 percent.

Bombardier Inc. (BBD-A.TO) climbed 3.15 percent after signing a firm order with WestJet Encore for five Q400 aircraft. The airline also signed a firm order for one Q400 aircraft in March 2015.

Bombardier also announced that SWISS has converted 10 of its 30 firm-ordered CS100 aircraft to the larger CS300 aircraft.

Air Canada (AC.TO) dropped 1.08 percent after a tentative agreement with Unifor for a new contract for five years.

The Information Technology Index dropped 0.60 percent, with Sierra Wireless, Inc. (SW.TO) adding 3.14 percent and Descartes Systems Group Inc. (DSG.TO) moving up 1.20 percent. BlackBerry Inc. (BB.TO) added 1.67 percent.

Constellation Software Inc. (CSU.TO) fell 1.99 percent, while Avigilon Corp. (AVO.TO) dropped 0.74 percent.

CAE Inc. (CAE.TO) fell 0.40 percent, after announcing a series of contracts with more than 30 airlines globally for commercial training solutions valued at more than C$90 million.

The Capped Telecommunication Index moved up 0.18 percent, as Rogers Communications Inc. (RCI.B.TO) inched up 0.17 percent, TELUS Corp. (T.TO) added 0.51 percent, and BCE Inc. (BCE.TO) moved up 0.09 percent.

Hudson's Bay Company (HBC.TO) soared 7.88 percent, after revealing a definitive agreement with METRO AG to acquire Galeria Holding, the parent company of Kaufhof, for an enterprise value of C$3.36 billion.

On the economic front, the Canadian Real Estate Association reported existing home sales in Canad increased 3.1 percent in May, compared to the increase of 2.7 percent in the prior year period.

Statistics Canada also reported Canadian manufacturing sales to have declined by 2.1 percent in April, while stats for March was revised down to 2.7 percent. Economists expected a decrease of only 0.5 percent in April.

In economic news elsewhere, a Federal Reserve report on Monday showed an unexpected drop in U.S. industrial production in May, reflecting decreases in mining and manufacturing output. Industrial production fell 0.2 percent in May following a downwardly revised 0.5 percent drop in April. Economists expected production to increase by 0.2 percent compared to the 0.3 percent drop originally reported for the previous month.

Meanwhile, activity in the New York manufacturing sector unexpectedly contracted in June, a report from the Federal Reserve Bank of New York said Monday. The New York Fed's general business conditions index dropped to a negative 2.0 in June from a positive 3.1 in May, with a negative reading indicating a contraction in regional manufacturing activity. Economists expected the index to climb to a reading of positive 5.9.

A report from the National Association of Home Builders on Monday showed homebuilder confidence to have improved significantly in June. The NAHB/Wells Fargo Housing Market Index jumped to 59 in June from 54 in May. The index was expected to increase to a reading of 56. The index is at its highest level since a matching reading in September of 2014.

Eurozone trade surplus increased in April as exports expanded from March amid fall in imports, data from Eurostat showed Monday. The trade surplus rose to a seasonally adjusted EUR 24.3 billion from EUR 19.9 billion in March. Exports gained 1.1 percent, while imports decreased 1.6 percent from the prior month.