TSX Ends Higher On Crude Oil Price Surge -- Canadian Commentary

(RTTNews) - Canadian stocks snapped a three-day loss to end higher on Tuesday, led by rising energy stocks as crude oil prices soared ahead of the weekly oil inventory reports with expectation of further drop in supplies. The uptick comes despite some poor performance of global equity markets with nearly all major markets ending lower.

The Canadian stock market rebounded from a three-month low due mainly to the strength in mining, energy, and financial sectors which were among the best performing stocks.

Most European markets ended in the red due to continued concerns over Greece's financial problems with its international creditors. G7 leaders unanimously called for a resolution of the crisis yesterday, but a solution is still not in sight.

Greece's new proposals on on budget, tax and debt reforms were rejected by EU officials.

The Greek prime minister, however, has offered to raise Value-Added Tax rates and accept higher budget surplus targets. Tsipras is set to brief members of his government on the progress with of talks with its international creditors, ahead of his meeting with Germany Chancellor Angela Merkel and French President Francois Hollande in Brussels on Wednesday.

Markets in the United States also ended unchanged although the S&P 500 ended a tad higher. A growing belief that the Fed will soon begin raising interest rates has put pressure on equities recently. Meanwhile, the lack of corporate news also contributed to the lackluster performance of some major averages.

The only economic news from the the U.S. was a Commerce Department report that showed wholesale inventories in the U.S. rose more than expected in April.

The benchmark S&P/TSX Composite Index closed Tuesday at 14,823.62, up 80.29 points or 0.54 percent. The index scaled an intraday high of 14,840.12 and a low of 14,687.00.

On Monday, the index closed at 14,743.33, down 213.83 points or 1.43 percent. The index scaled an intraday high of 14,939.12 and a low of 14,714.72.

Gold futures settled higher with the dollar trending lower against some major currencies and investors focused on the Greek financial debt woes with no resolution in the horizon.

The Gold Index dropped 1.68 percent, although gold for August delivery gained $4.00 or 0.3 percent to settle at $1,177.60 an ounce on the New York Mercantile Exchange Tuesday.

Among gold stocks, Goldcorp Inc. (G.TO) dropped 1.12 percent, Barrick Gold Corp. (ABX.TO) added 0.28 percent, Kinross Gold Corp. (K.TO) slipped 1.59 percent, IAMGOLD Corp. (IMG.TO) jumped 3.36 percent, while Eldorado Gold Corp. (ELD.TO) dropped 1.41 percent.

Detour Gold Corp. (DGC.TO) added 1.22 percent.

The Capped Materials Index dropped 0.12 percent, with Agrium Inc. (AGU.TO) up 0.24 percent. Agnico Eagle Mines Limited (AEM.TO) down 1.93 percent, while Franco-Nevada Corp. (FNV.TO) slipped 3.11 percent. Potash Corp. of Saskatchewan Inc. (POT.TO) inched up 0.13 percent.

Crude oil futures surged to end at a one-week high, ahead of the weekly oil reports from the American Petroleum Institute and the U.S. Energy Information Administration, with expectation for sharp drop in inventories.

The Energy Index surged 1.76 percent, with U.S. crude oil futures for July delivery, the most actively traded contract, soaring $2.00 or 3.4 percent, to settle at $60.14 a barrel on the New York Mercantile Exchange Tuesday.

Among energy stocks, Suncor Energy Inc. (SU.TO) gained 2.40 percent, while Crescent Point Energy Corp. (CPG.TO) added 2.42 percent. Encana Corp. (ECA.TO) added 1.29 percent, and Canadian Natural Resources Limited (CNQ.TO) gathered 1.34 percent.

Canadian Oil Sands Limited (COS.TO) gathered 2.44 percent, while Pacific Rubiales Energy Corp. (PRE.TO) dropped 1.58 percent. Cenovus Energy (CVE.TO) moved up 1.37 percent, while Enbridge Inc. (ENB.TO) gained 0.84 percent.

The Diversified Metals & Mining Index jumped 1.73 percent, as First Quantum Minerals Ltd. (FM.TO) surged 5.73 percent, Lundin Mining Corp. (LUN.TO) fell 0.35 percent, and Sherritt International Corp. (S.TO) moved up 0.43 percent. Teck Resources (TCK.B.TO) gained 2.63 percent, while Capstone Mining Corp. (CS.TO) added 3.31 percent.

The heavyweight Financial Index gathered 0.58 percent, as Royal Bank of Canada (RY.TO) fell 0.90 percent, National Bank of Canada (NA.TO) dipped 0.06 percent, and Bank of Montreal (BMO.TO) added 0.67 percent.

Bank of Nova Scotia (BNS.TO) gained 1.27 percent, while Toronto-Dominion Bank (TD.TO) jumped 1.83 percent. Canadian Imperial Bank of Commerce (CM.TO) added 0.10 percent.

The Capped Health Care Index fell 1.00 percent as Valeant Pharmaceuticals International, Inc. (VRX.TO) lost 0.82 percent, Concordia Healthcare Corp. (CXR.TO) shed 1.09 percent, and Catamaran Corp. (CCT.TO) moved up 0.16 percent.

The Capped Industrials Index moved up 0.15 percent, as Bombardier Inc. (BBD-A.TO) dipped 0.20 percent, Finning International Inc. (FTT.TO) dropped 0.68 percent. Canadian Pacific Railway Limited (CP.TO) shed 0.72 percent, while Canadian National Railway (CNR.TO) gained 0.95 percent. CAE Inc. (CAE.TO) added 0.27 percent, while Air Canada (AC.TO) dropped 0.92 percent.

Ballard Power Systems Inc. (BLD.TO) dived 3.78 percent.

The Information Technology Index dropped 0.25 percent, after Sierra Wireless, Inc. (SW.TO) fell 1.18 percent and Descartes Systems Group Inc. (DSG.TO) added 0.92 percent. BlackBerry Inc. (BB.TO) slipped 0.08percent, while Constellation Software Inc. (CSU.TO) fell 1.36 percent.

The Capped Telecommunication Index inched up 0.02 percent, as Rogers Communications Inc. (RCI.B.TO) dropped 0.09 percent, TELUS Corp. (T.TO) dropped 0.05 percent, and BCE Inc. (BCE.TO) surrendered 0.06 percent. Sandvine Corp. (SVC.TO) fell 0.75 percent.

Clearwater Seafoods (CLR.TO) fell 1.89 percent, after the company announced a C$40 million bought deal financing.

Confirming earlier reports, General Electric Co. (GE) said it is selling its U.S. Sponsor Finance business to Canada Pension Plan Investment Board, or CPPIB. The deal is valued at about $12 billion and includes a $3 billion bank loan portfolio. The transaction is expected to close in the third quarter of 2015, subject to customary regulatory and other approvals.

Canadian yoga-wear maker Lululemon Athletica Inc. (LULU) said its first-quarter profit increased from the previous year, helped by higher revenues and a favorable tax rate. Adjusted earnings and revenues topped Wall Street estimates, even as the company lifted its forecast for the year.

On the economic front, Chinese inflation slowed more than expected in May on easing food price growth, and producer prices extended its decline for the 39th consecutive month, renewing fears of deflationary pressure amid weak demand.

Consumer prices increased 1.2 percent in May from last year, slower than the 1.5 percent growth seen in April, the National Bureau of Statistics said Tuesday. Inflation was expected to ease to 1.3 percent.

This was the weakest inflation since January, when prices grew 0.8 percent and was also below the government's full year target of around 3 percent.

The NBS also showed that producer prices declined for 39 straight months. Producer prices dropped 4.6 percent for the third straight month in May. Prices were expected to fall by 4.5 percent.

The Eurozone economy grew as initially estimated in the first quarter underpinned by widespread contribution from all sub-components.

Gross domestic product expanded 0.4 percent, in line with the estimate published on May 13. The 19-nation currency bloc grew by revised 0.4 percent in the fourth quarter and 0.2 percent in the third quarter of 2014.

On a yearly basis, economic growth improved to 1 percent from 0.9 percent a quarter ago. The annual growth rate also matched flash estimate.

Germany's labor costs growth quickened in the first quarter of 2015, reaching the highest since first quarter of 2013, figures from the Destatis showed Tuesday. Labor costs per hour worked consisting of gross earnings and non-wage costs grew a calendar adjusted 3.2 percent year-on-year in the first quarter, faster than the revised 2.1 percent rise in the fourth quarter. This is highest rate of growth since first quarter of 2013, when costs rose 3.9 percent.

Germany's manufacturing turnover increased for the first time in three months in April, preliminary figures from Destatis showed Tuesday. Manufacturing turnover rose a seasonally and working-day-adjusted 1.2 percent month-over-month in April, reversing a 0.3 percent fall in March, which was revised from a 1.0 percent decrease estimated earlier.

The U.K. trade deficit narrowed more than expected to a 13-month low in April, the Office for National Statistics showed Tuesday. The visible trade deficit narrowed by GBP 2.1 billion to GBP 8.6 billion in April, the smallest shortfall since March 2014. This was also the largest monthly fall since June 2013. The deficit was forecast to narrow to GBP 9.9 billion.