TSX Ends Lower, Bucks Global Trend -- Canadian Commentary

(RTTNews) - Canadian stocks plunged for second straight session Thursday, bucking the global trend, after sharp declines in gold and energy stocks more than offset investor sentiments on solid bounce back of Chinese markets.

Markets around the globe bounced back from steep declines yesterday. The Chinese stock market bounced back strongly from Wednesday's sharp sell-off after Chinese authorities unveiled fresh support measures. Optimism for a Greek debt deal and yesterday's Fed minutes also contributed to the positive mood among investors.

Chinese stock markets rallied as authorities brought in a raft of unorthodox measures such as banning major shareholder selling for the next six months.

China's central bank also said it would provide sufficient liquidity to China Securities Finance Corp., the state-backed margin finance company. Additionally, the China Banking Regulatory Commission said it would encourage banks to support companies' share buybacks by offering them collateralized loans.

Markets across Europe rebounded Thursday, after Greece promised to implement pension and tax reforms to obtain fresh bailout aid. Greece has reportedly submitted a reform plan to the Eurogroup as indicated by Prime Minister Alexi Tsipras before the European Parliament.

Markets in the United States also ended in positive territory. The U.S. Federal Reserve hinted yesterday that it is in no hurry to raise interest rates anytime soon. The minutes of the most recent Fed meeting showed deepening anxiety over the Greek debt crisis.

Meanwhile, in some disappointing economic news from across the border, first-time claims for U.S. unemployment benefits unexpectedly increased in the week ended July 4, with claims reaching their highest level in over four months, a report from the Labor Department showed Thursday.

The benchmark S&P/TSX Composite Index closed Thursday at 14,278.49, down 133.58 points or 0.93 percent. The index scaled an intraday high of 14,558.69 and a low of 14,275.54.

On Wednesday, the index closed down 212.43 points or 1.45 percent, at 14,412.07. The index scaled an intraday high of 14,599.99 and a low of 14,379.92.

Crude oil futures ended sharply higher as Chinese equity markets rebounded while easing concerns of a slowdown in the global economy. Concerns of a supply glut also eased as it could take at least a month before Iranian crude begins to flow into global markets after sanctions are lifted.

On Wednesday, a weekly report from the U.S. Energy Information Administration said U.S. crude oil inventories increased 0.4 million barrels in the week ended July 3, while analysts expected stocks to decline 1.1 million barrels.

The Energy Index shed 1.27 percent, although U.S. crude oil futures for August delivery jumped $1.13 or 2.2 percent, to settle at $52.78 a barrel on the New York Mercantile Exchange Thursday.

Among energy stocks, Suncor Energy Inc. (SU.TO) dropped 1.89 percent, while Canadian Natural Resources Limited (CNQ.TO) fell 0.55 percent. Crescent Point Energy Corp. (CPG.TO) declined 0.91 percent, while Encana Corp. (ECA.TO) gained 0.63 percent.

Pacific Rubiales Energy Corp. (PRE.TO) plummeted 45.71 percent, after ALFA and Harbour Energy terminated their offer to acquire the company.

Cenovus Energy Inc. (CVE.TO) fell 1.02 percent, Canadian Oil Sands (COS.TO) shed 1.96 percent, and Enbridge (ENB.TO) dropped 1.51 percent.

Gold futures ended lower with investors opting for the riskier equity assets after global markets rebounded following yesterday's massive sell-off. The drop in prices come despite renewed hopes the Federal Reserve will keep interest rates at zero this year.

The Gold Index fell 0.56 percent, with gold for August delivery shedding $4.30 or 0.4 percent, to settle at $1,159.20 an ounce on the New York Mercantile Exchange Thursday.

Among gold stocks, Goldcorp Inc. (G.TO) dropped 0.61 percent, Barrick Gold Corp. (ABX.TO) fell 1.91 percent, Yamana Gold Inc. (YRI.TO) ended flat at $3.61 a share and IAMGOLD Corp. (IMG.TO) also ended flat at $2.38 a share.

Centamin plc (CEE.TO) climbed 2.63 percent, after reporting preliminary total gold production for the second quarter at 107,781 ounces, a 33% increase from last year.

The Capped Materials Index fell 0.67 percent, as Agrium Inc. (AGU.TO) slid 1.77 percent and Agnico Eagle Mines Limited (AEM.TO) dipped 0.03 percent. Potash Corp. of Saskatchewan Inc. (POT.TO) shed 2.04 percent.

The Diversified Metals & Mining Index gained 1.76 percent, as First Quantum Minerals Ltd. (FM.TO) jumped 4.62 percent and Teck Resources Limited (TCK.B.TO) slipped 1.04 percent. HudBay Minerals (HBM.TO) climbed 2.96 percent, while Sherritt International (S.TO) plunged 6.40 percent.

The heavyweight Financial Index dropped 0.61 percent, as Royal Bank of Canada (RY.TO) fell 0.16 percent, National Bank of Canada (NA.TO) declined 0.71 percent, and Bank of Montreal (BMO.TO) surrendered 0.39 percent.

Toronto-Dominion Bank (TD.TO) fell 0.80 percent, Bank of Nova Scotia (BNS.TO) shed 0.85 percent, and Canadian Imperial Bank of Commerce (CM.TO) dropped 0.37 percent.

The Capped Health Care Index fell 0.56 percent as Valeant Pharmaceuticals International, Inc. (VRX.TO) dropped 0.93 percent, Concordia Healthcare Corp. (CXR.TO) shed 1.67 percent, and Catamaran (CCT.TO) slipped 0.36 percent.

The Capped Industrials Index surrendered 1.35 percent, as Bombardier Inc. (BBD-A.TO) plunged 8.26 percent and Finning International Inc. (FTT.TO) fell 0.68 percent. Canadian National Railway (CNR.TO) fell 0.94 percent, while Canadian Pacific Railway (CP.TO) declined 1.08 percent. Air Canada (AC.TO) gained 1.79 percent.

The Information Technology Index fell 0.54 percent, as BlackBerry Inc. (BB.TO) moved up 0.92 percent, Sierra Wireless, Inc. (SW.TO) added 0.30 percent, and Descartes Systems Group Inc. (DSG.TO) dipped 0.54 percent.

The Capped Telecommunication Index slipped 0.25 percent, as TELUS Corp. (T.TO) shed 0.39 percent, BCE Inc. (BCE.TO) slipped 1.10 percent, Manitoba Telecom Services (MBT.TO) gained 1.79 percent, and Rogers Communication (RCI-B.TO) surrendered 1.62 percent.

On the economic front, data from Statistics Canada showed the country's new housing price index rose 0.2 percent in May, following a 0.1 percent increase in April. Economists were expecting the index to remain unchanged from the previous month.

Canada's seasonally adjusted annualized rate of housing starts climbed 202,818 units in June, up from 196,981 units in May, according to a data from the Canada Mortgage and Housing Corp. The reading beat expectations for an increase of 190,000 units.

In other economic news, a Labor Department report showed initial jobless claims to have climbed to 297,000, an increase of 15,000 from the previous week's revised level of 282,000. Economists expected jobless claims to dip to 276,000 from the 281,000 originally reported for the previous week.

China's inflation increased more than expected in June as both food and non-food prices moved higher, while producer prices continued its downward trend. Consumer prices increased 1.4 percent year-on-year in June after rising 1.2 percent in May, the National Bureau of Statistics said Thursday. Inflation was expected to rise marginally to 1.3 percent.

Eurozone house prices increased in the first quarter after a drop in the prior quarter, preliminary figures from Eurostat showed Thursday. House prices rose 0.3 percent quarter-on-quarter in the three-month period to March, in contrast to a 0.6 percent decrease in the previous three months.

Germany's exports grew unexpectedly in May, taking the trade surplus to a record high, data from Destatis revealed Thursday. Exports rose 1.7 percent from the prior month, confounding expectations for a 0.8 percent fall. It was the fastest growth since December, when it grew 2.9 percent. In April, exports had climbed 1.6 percent.

At the same time, German imports rebounded in May, up 0.4 percent versus a 0.8 percent drop in April. Economists had expected a 0.1 percent gain. As a result, the trade surplus increased to a record EUR 22.8 billion from a revised EUR 21.5 billion in April.

British house prices increased at the fastest pace in eleven months in June, the latest survey from the Royal Institution of Chartered Surveyors showed on Thursday. The survey showed that monthly house price balance climbed to +40 in June from +34 in May, while it was expected to increase slightly to +36. It was the biggest rate of growth since July 2014.

The International Monetary Fund lowered its global growth forecast for the year, due to an unexpected decline in output in the United States and warned that uncertainty in Greece and re-balancing in China pose risks to the outlook.

In the July update to its World Economic Outlook, released Thursday, the Washington-based lender forecast 3.3 percent global growth for this year, which is smaller than the 3.5 percent predicted in April. The global growth projection for next year, however, was maintained at 3.8 percent. Global growth was 3.4 percent in 2014 and 2.2 percent in the first quarter of this year, the report said.