TSX Ends Higher On Global Cues -- Canadian Commentary

(RTTNews) - Canadian stocks ended higher for a second straight session on Tuesday, tracking rising global equity markets as Greece's proposal for reforms are under consideration by its creditors, brightening chances for an agreement to access the bailout funds badly required by the beleaguered country.

The uptick was driven by solid gains in the mining and energy sectors, with financial and materials stocks also contributing substantially.

Greece's international creditors are in the process of scrutinizing fresh reform proposals submitted by Greece on Monday, to weigh the scope for reaching an agreement in the Eurogroup meeting scheduled for Wednesday. Nonetheless, 'Grexit' worries refuse to die down as voices of dissent can be heard in Athens even from within the ruling party, over more concessions being offered.

The proposals from Greece were received positively by creditors who said work will commence immediately with the aim of reaching a deal later this week, suggesting that an end to a five-month long deadlock over releasing bailout aid to the cash-strapped country may be near.

The developments in negotiations between Greece and its creditors has stymied talk of default for now.

In some soft economic news from China, the Flash Manufacturing PMI for June showed contraction albeit at a slower pace. The sector showed signs of improvement as output stabilized amid a slight pick-up in total new work and purchasing activity rising slightly over the month. The data also evidenced the sector has lost growth momentum in the second quarter as a whole.

Meanwhile, new home sales in the U.S. showed a further upside in May to reach its highest level in over seven years, while new orders for U.S. manufactured durable goods fell more than expected in May with orders for transportation equipment dropping steeply.

U.S. markets closed moderately higher with stocks showing a lack of direction for much of the day. Optimism over the developments in Greece contributed to the recent strength, but traders seemed to be waiting for an actual agreement before further buying.

European markets also ended in the green, extending the gains from yesterday's sharp rally. The gains were fueled by optimism over a Greek debt deal and on some strong eurozone private sector report.

The benchmark S&P/TSX Composite Index closed Tuesday at 14,904.91, up 114.43 points or 0.77 percent. The index scaled an intraday high of 14,923.76 and a low of 14,814.37.

On Monday, the index gained 137.36 points or 0.94 percent, to settle at 14,790.48. The index scaled an intraday high of 14,827.40 and a low of 14,644.82.

Crude oil futures ended higher with traders taking positions ahead of the weekly oil report from the U.S. Energy Information Administration on Wednesday and the American Petroleum Institute later today. Oil prices scaled over $61 a barrel despite further signs the Chinese economy is sputtering and the dollar trending sharply higher against a basket of some major currencies.

The Energy Index gained 1.65 percent, as U.S. crude oil futures for August delivery gathered $0.63 or 1.0 percent, to settle at $61.01 a barrel on the New York Mercantile Exchange Tuesday.

Among energy stocks, Suncor Energy Inc. (SU.TO) added 2.29 percent, while Crescent Point Energy Corp. (CPG.TO) gained 3.30 percent and Encana Corp. (ECA.TO) gathered 0.95 percent

Enbridge Inc. (ENB.TO) moved up 1.28 percent, while Cenovus Energy (CVE.TO) advanced 1.15 percent.

Gold futures ended lower as expectations that Greece is nearing a deal with its international creditors strengthened with easing concerns of a Greek default. The precious metal was also impacted after some soft manufacturing data out of China and some mixed economic data from the U.S. with new orders for durable goods dropping more than expected.

The Gold Index added 0.34 percent, with gold for August delivery shedding $7.50 or 0.6 percent to settle at $1,176.60 an ounce in electronic trade on the New York Mercantile Exchange Tuesday.

Among gold stocks, Goldcorp Inc. (G.TO) added 2.35 percent, Barrick Gold Corp. (ABX.TO) shed 0.07 percent, and Kinross Gold Corp. (K.TO) gained 1.08 percent. IAMGOLD Corp. (IMG.TO) moved up 0.37 percent, while Eldorado Gold Corp. (ELD.TO) fell 0.19 percent.

The Capped Materials Index gained 0.74 percent, as Agrium Inc. (AGU.TO) added 0.91 percent and Agnico Eagle Mines Limited (AEM.TO) fell 0.32percent. Franco-Nevada Corp. (FNV.TO) gained 0.20 percent, while Potash Corp. of Saskatchewan Inc. (POT.TO) gathered 0.82 percent.

The Diversified Metals & Mining Index jumped 2.22 percent, even as First Quantum Minerals Ltd. (FM.TO) gained 3.96 percent, Sherritt International (S.TO) slid 0.46 percent, and Teck Resources (TCK.B.TO) jumped 3.52 percent.

The heavyweight Financial Index added 0.88 percent, as Royal Bank of Canada (RY.TO) gained 0.70 percent, National Bank of Canada (NA.TO) moved up 1.01 percent, and Bank of Montreal (BMO.TO) gathered 1.27 percent.

Toronto-Dominion Bank (TD.TO) gained 0.93 percent, Bank of Nova Scotia (BNS.TO) jumped 1.15 percent, and Canadian Imperial Bank of Commerce (CM.TO) advanced 1.03 percent.

.The Capped Health Care Index inched up 0.04 percent as Valeant Pharmaceuticals International, Inc. (VRX.TO) gained 0.28 percent, Extendicare Inc. (EXE.TO) added 0.26 percent, Catamaran Corp. (CCT.TO) moved up 0.17 percent, and Concordia Healthcare Corp. (CXR.TO) dropped 0.22 percent.

The Capped Industrials Index added 0.03 percent, as Bombardier Inc. (BBD-A.TO) dropped 1.20 percent and Finning International Inc. (FTT.TO) shed 0.29 percent. Canadian Pacific Railway Limited (CP.TO) fell 0.15 percent, while Canadian National Railway Company (CNR.TO) dipped 0.07 percent.

The Information Technology Index shed 0.55 percent, as BlackBerry Inc. (BB.TO) plunged 3.89 percent, after reporting a disappointing first-quarter profit.

Sierra Wireless, Inc. (SW.TO) dropped 0.24 percent, while Descartes Systems Group Inc. (DSG.TO) fell 0.25 percent.

The Capped Telecommunication Index edged down 0.03 percent, as TELUS Corp. (T.TO) shed 0.75 percent and Rogers Communications Inc. (RCI.B.TO) gathered 0.85 percent.

BCE Inc. (BCE.TO) gathered 0.43 percent, while Manitoba Telecom Services (MBT.TO) dropped 0.64 percent.

In economic news, a Commerce Department report on Tuesday showed new home sales with a further upside in May to reach its highest level in over seven years, after reporting a sharp jump in U.S. new home sales in the previous month. New home sales in May climbed 2.2 percent to an annual rate of 546,000 after surging 8.1 percent to the revised April rate of 534,000. Economists expected new home sales to rise to a rate of 525,000 from the 517,000 originally reported for the previous month, reflecting a 1.5 percent increase.

Separately, another the Commerce Department report on Tuesday showed new orders for U.S. manufactured durable goods fell more than expected in May, with orders for transportation equipment showing another steep drop. Durable goods orders tumbled 1.8 percent in May following a revised 1.5 percent decrease in April. Economists expected orders to dip by 0.6 percent compared to the 1.0 percent drop reported the previous month.

Elsewhere, the Chinese manufacturing sector continued to contract in June, albeit at a slower pace, HSBC Bank said Tuesday. The preliminary PMI score for June came in at of 49.6, a three-month high for the index. The reading also topped expectations of 49.4 and was up from 49.2.

Eurozone private sector growth hit a four-year high in June, reflecting broad-based upturn in services and manufacturing sectors, preliminary data from Markit Economics showed. The flash composite output index rose unexpectedly to a 49-month high of 54.1 in June from 53.6 in May. It was expected to ease slightly to 53.5.

British manufacturers reported a fall in orders for June largely due to some sluggish export demand, the latest Industrial Trends Survey from the Confederation of British Industry showed Tuesday. About 26 percent said total order books were below normal and 19 percent said they were above, giving a rounded balance of -7 percent in June. Economists had forecast a positive balance of 2 percent.