TSX Ends Lower On Concerns Over Global Economy -- Canadian Commentary

(RTTNews) - Canadian stocks plunged a near 2 percent to end lower for a fifth straight session Friday, tracking declining global equity markets, driven by weakness in commodity prices and continued concerns over the global economy continued to weigh on investor sentiment.

The majority of the Canadian sectors ended in the red, led by mining, energy, financial, healthcare, and industrial stocks.

Markets in Europe ended solidly in negative territory, capping the weakest trading week 2015 thus far. Investor concerns over upcoming snap elections in Greece and the continued sell-off in the Chinese stock market dampened sentiment.

Greek Prime Minister Alexis Tsipras tendered his resignation late Thursday, paving the way for snap elections next month, in a move to quell a rebellion in his leftist Syriza party.

Weak manufacturing data from China and the continued sell-off in the Chinese stock market added to the negative mood.

A preliminary survey by Markit and Caixin on Friday showed manufacturing activity in China to have slipped to a 6-1/2 year low. The Caixin manufacturing PMI declined to 47.1 in August from 47.8 in July.

Markets in the United States ended deep in the red, as concerns about the outlook for the global economy continues to weigh on investor sentiment, with the Shanghai Composite Index plunging by another 4.3 percent. With the steep losses on the day, all three major averages ended the session at multi-month closing lows.

The benchmark S&P/TSX Composite Index closed Thursday at 13,473.67, down 263.33 points or 1.92 percent. The index scaled an intraday high of 13,697.53 and a low of 13,468.72.

On Thursday, the index closed down 299.63 points or 2.13 percent, at 13,737.00. The index scaled an intraday high of 14,022.14 and a low of 13,736.96.

Crude oil futures ended sharply lower on demand growth concerns as global equity markets declined sharply and with mounting evidence that China is going through a rough economic patch.

The Energy Index dived 1.45 percent, with U.S. crude oil futures for October delivery, the most actively traded contract, plunging $0.87 or 2.1 percent, to settle at $40.45 a barrel on the New York Mercantile Exchange Friday.

Baytex Energy Corp. (BTE.TO) plummeted 10.56 percent, Crescent Point Energy Corp. (CPG.TO) shed 4.90 percent, Canadian Natural Resources Limited (CNQ.TO) fell 2.65 percent, and Encana Corp. (ECA.TO) dipped 0.85 percent. Suncor Energy Inc. (SU.TO) inched up 0.18 percent.

The Diversified Metals & Mining Index dived 3.14 percent, as First Quantum Minerals (FM.TO) plunged 7.37 percent, Teck Resources Limited (TCK-B.TO) dropped 2.70 percent, Lundin Mining Corp. (LUN.TO) slipped 2.30, and HudBay Minerals Inc. (HBM.TO) surrendered 2.55 percent.

Gold futures ended higher with investors seeking the safe haven appeal of the precious metal as the riskier equity assets witnessed a global sell-off on concerns over the health of the global economy led by China.

The Gold Index fell 2.26 percent, with gold for December delivery adding $6.40 or 0.6 percent, to settle at $1,159.60 an ounce on the New York Mercantile Exchange Friday.

Among gold stocks, Yamana Gold Inc. (YRI.TO) fell 4.44 percent, Barrick Gold Corp. (ABX.TO) dropped 2.32 percent, and Kinross Gold Corp. (K.TO) surrendered 3.20 percent. Goldcorp Inc. (G.TO) added 0.74 percent.

Eldorado Gold Corp. (ELD.TO) plummeted 14.01 percent. after announcing it stop mining in northern Greece. The leftist Greek government temporarily halted activity at some of the company's operations earlier in the week.

The Capped Materials Index dropped 2.92 percent, as Agrium Inc. (AGU.TO) shed 4.01 percent, Agnico Eagle Mines Limited (AEM.TO) fell 2.87 percent, and Potash Corp. of Saskatchewan Inc. (POT.TO) surrendering 2.02 percent.

The heavyweight Financial Index plunged 1.90 percent, as National Bank of Canada (NA.TO) dropped 2.82 percent, Bank of Montreal (BMO.TO) fell 1.56 percent, and Royal Bank of Canada (RY.TO) shed 1.73 percent.

Toronto-Dominion Bank (TD.TO) fell 1.24 percent, Bank of Nova Scotia (BNS.TO) fell 1.78 percent, and Canadian Imperial Bank of Commerce (CM.TO) dipped 1.50 percent.

The Capped Health Care Index plunged 3.33 percent as Concordia Healthcare Corp. (CXR.TO) dived 6.40 percent and Extendicare Inc. (EXE.TO) inched up 0.13 percent.

Valeant Pharmaceutical International (VRX.TO) dropped 2.16 percent.

The Capped Information Technology Index declined 1.73 percent, as BlackBerry Limited (BB.TO) slipped 2.59 percent.

Among other tech stocks, Sierra Wireless (SW.TO) fell 2.60 percent, Descartes Systems Group (DSG.TO) declined 2.36 percent, and Avigilon Corp. (AVO.TO) dropped 1.53 percent.

The Capped Telecommunication Index gained 0.79 percent, as Rogers Communication (RCI-B.TO) moved up 2.20 percent and BCE Inc. (BCE.TO) added 1.43 percent. TELUS Corp. (T.TO) inched up 0.07 percent, while Manitoba Telecom Services Inc. (MBT.TO) slipped 0.59 percent.

The Capped Industrials Index fell 2.40 percent, even as Bombardier (BBD.B.TO) gained 1.57 percent and Finning International Inc. (FTT.TO) dipped 2.55 percent.

Canadian Pacific Railway (CP.TO) shed 3.22 percent, while Canadian National Railway (CNR.TO) lost 2.27 percent.

CGI Group Inc. (GIB-A.TO) fell 1.41 percent, after being awarded a US$124 million, five-year contract with the U.S. Army Training and Doctrine Command Intelligence Directorate.

On the economic front, data from Statistics Canada showed that the nation's retail sales increased 0.6 percent on a monthly basis to C$43.2 billion in June. This was higher than the expected reading of 0.2 percent, following a 1.0 percent rise a month earlier.

Core retail sales grew by 0.8 percent - also topping forecasts for 0.6 percent, after recording a 0.9 percent rise in the previous month.

Separate data showed that Canada's consumer price index increased 1.3 percent on year in July, matching expectations. Economists were forecasting a reading of 1.0 percent.

On a monthly basis, the CPI edged up 0.1 percent, in line with what the economists had expected. In June, the consumer prices rose 0.2 percent.

Elsewhere from Asia, the manufacturing sector in China continued to struggle in August as the contraction accelerated, a preliminary survey showed on Friday, with a PM Index score of 47.1, down from 47.8 in July -- a 77-month low.

Eurozone consumer confidence strengthened for the first time in five months during August, preliminary data from the European Commission revealed Friday. The flash consumer confidence index for the euro area rose to -6.8 from July's -7.1. Economists had expected a -6.9 reading.

Eurozone private sector growth improved in August underpinned by German activity, while the expansion in France eased to a four-month low, signaling the widening divergence between two largest euro area economies. The flash Purchasing Managers' Index ticked higher to 54.1 from July's final reading of 53.9 and remained at an expansionary level for the twenty-sixth successive month, preliminary data from Markit Economics showed Friday.

Germany's private sector grew at the fastest pace in four months in August, flash survey data from Markit revealed Friday. The flash composite output index rose to 54 in August from 53.7 in July. The reading reached a 4-month high in August.

German consumer sentiment is set to drop unexpectedly in September, as economic and income expectations floundered despite Greece reaching an agreement on a controversial debt deal. The forward-looking consumer sentiment index fell to 9.9 in September from 10.1 in August, survey data from market research group GfK showed Friday. Economists had forecast it to remain unchanged at 10.1.

The U.K. logged its first July budget surplus since 2012, the Office for National Statistics showed Friday. Public sector net borrowing excluding public sector banks decreased by GBP 1.4 billion to a surplus of GBP 1.3 billion or equivalent to -0.1 percent of gross domestic product in July. This was the first reported July surplus since 2012. Economists had forecast a surplus of GBP 1.1 billion.

British house price sentiment index, or HPSI, rose to 59.5 in August from 58.6 in the previous month. This marked the twenty-ninth successive month of the index remaining above 50.