TSX Ends Lower On Russia Concerns -- Canadian Commentary

(RTTNews) - Canadian stocks ended lower on Wednesday, tracking declining U.S. equity markets, on concerns over tensions between Russia and the West over Crimea, with comments from U.S. President Barack Obama suggesting more stringent sanctions to come. The main index moved higher at mid-day, but buying interest soon waned and subsequently pulled back off their highs after showing little direction in trading.

Investors largely ignored some upbeat economic news from the U.S., where a Commerce Department report showed new orders for U.S. manufactured durable goods rose more than expected in February, with orders for transportation equipment showing a substantial rebound.

Asian markets mostly closed on a positive note amid hopes the Chinese government will soon come out with a stimulus plan to revive the economy. Major European markets ended higher on expectations of monetary stimulus from the European Central Bank.

The S&P/TSX Composite Index closed Wednesday at 14,184.10, down 115.39 points or 0.81 percent. The index scaled an intraday high of 14,345.40 and a low of 14,179.47.

Crude oil ended sharply higher despite an official report from the Energy Information Administration that showed crude oil inventories in the U.S. to have jumped more than expected last week.

The Energy Index dropped 0.48 percent, with U.S. crude oil futures for May delivery, gaining $0.67 or 0.7 percent to close at $100.37 a barrel Wednesday on the Nymex.

Among energy stocks, Suncor Energy Inc. (SU.TO) shed 0.79 percent, while Encana Corp. (ECA.TO) added 0.61 percent. Pembina Pipeline Corp. (PPL.TO) gained 3.24 percent, while Canadian Natural Resources Ltd. (CNQ.TO) slipped 0.98 percent. Cenovus Energy Inc. (CVE.TO) dipped 0.10 percent, while, Enbridge Inc. (ENB.TO) surrendered 0.32 percent.

Gold ended at a near six-week low after the dollar strengthened against some major currencies on some upbeat, better than expected U.S. durable goods data for February, with increasing demand from China.

The Global Gold Index shed 4.60 percent, with gold futures for April delivery, dropping $8.00 or 0.6 percent to close at $1,303.40 an ounce Wednesday on the Nymex.

Among gold stocks, Kinross Gold Corp. (K.TO) plunged 6.20 percent, while Barrick Gold Corp. (ABX.TO) surrendered 4.21 percent. Detour Gold Corp. (DGC.TO) plunged 8.52 percent, while IAMGOLD Corporation (IMG.TO) dived 5.43 percent.

The Capped Materials Index plummeted 2.94 percent, with Potash Corp. of Saskatchewan Inc. (POT.TO) up 0.21 percent.

The heavyweight Financial Index dropped 0.46 percent with the Toronto-Dominion Bank (TD.TO) down 0.27 percent, Royal Bank of Canada (RY.TO) down 0.08 percent, and Bank of Montreal (BMO.TO) down 0.35 percent. Bank of Nova Scotia (BNS.TO) dropped 0.28 percent, while National Bank of Canada (NA.TO) shed 0.32 percent.

The Diversified Metals & Mining Index dropped 2.02 percent, with Teck Resources Limited (TCK.B.TO) diving 3.85 percent, Lundin Mining Corp. (LUN.TO) dropped 1.38 percent, and First Quantum Minerals (FM.TO) down 1.37 percent.

The Information Technology Index surrendered 1.55 percent, with BlackBerry Limited (BB.TO) down 2.78 percent.

The Capped Industrials Index declined 0.83 percent, with Bombardier Inc. (BBD.B.TO) dropping 2.18 percent. Bombardier Aerospace signed a firm purchase deal worth around $73.7 million with Newfoundland and Labrador for two Bombardier 415 amphibious aircraft.

In corporate news, Onex Corp. (OCX.TO) edged up 0.10 percent, after reports Blackstone Group L.P. (BX) is close to a deal to acquire industrial and automotive parts maker Gates Global, Inc. Gates Global is 55.9 percent owned by Canadian private-equity firm Onex Corp. and 41.5 percent owned by Canada Pension Plan Investment Board or CPPIB. The deal is billed as the second largest private-equity deal so far this year.

Concordia Healthcare Corp. (CXR.TO) dropped 2.30 percent after announcing that its unit Pinnacle Biologics was granted pre-market supplement approval by the U.S. Food and Drug Administration for its Optiguide DCYL700 Fiber Optic Diffuser Series flexible fiber.

Shares of Valeant Pharmaceuticals International Inc. (VRX.TO) dropped 2.57 percent following the U.S. Food and Drug Administration approving a new drug application.

Capstone Mining (CS.TO) soared 5.13 percent after a prefeasibility study extended the life of its Pinto Valley Mine by eight years, from 2018 to 2026. The study has also forecast annual production for first five years at 128.4 million pounds of copper contained in concentrates and 6.6 million pounds of copper cathode.

Ballard Power Systems (BLD.TO) plummeted 23.21 percent, amid speculations about a new deal.

In economic news, a U.S. Commerce Department report showed durable goods orders rose more than expected in February, showing a 2.2 percent rise, following a revised 1.3 percent decrease a month earlier. Economists expected orders to increase by about 1.0 percent.

However, when excluding the jump in orders for transportation equipment, durable goods orders inched up by just 0.2 percent in February after rising by a revised 0.9 percent in January. Ex-transportation orders had been expected to edge up by 0.3 percent compared to the 1.1 percent increase originally reported for January.

Elsewhere, the euro area leading index rose marginally in February indicating that the rebound effects from the recession is fading and the pace of growth may not accelerate further, the Conference Board said Wednesday. The leading economic index that signals turning points in the business cycle, gained 0.1 percent from January, when it rose 1.4 percent.

The World Bank on Wednesday warned that the Russian economy could shrink significantly this year and the next if the crisis caused by Russia's annexation of the Ukrainian autonomous region of Crimea worsens. Under the Bank's low-risk scenario, growth is projected to slow to 1.1 percent in 2014 and slightly picking up to 1.3 percent in 2015.

The high-risk scenario assumes a more severe shock to economic and investment activities if the geopolitical situation worsens and projects a contraction in output of 1.8 percent for 2014. Under the high-risk scenario, the economy is seen rebounding with 2.1 percent growth in 2015, if there is an 'orderly resolution' of the Crimean crisis.

Meanwhile, comments made by top officials of the European Central Bank suggest it might consider bold steps to fight the significantly low inflation, which might see the central bank going in for negative interest rates and asset purchases.

The comments by top policy makers from different parts of the euro zone suggest the ECB, faced with a weak economy and strong currency, is prepared to shed some of its cautious approach and take more-aggressive action, as central banks in the U.S., the U.K. and Japan have done for years.