TSX Ends Sharply Higher After Fed Policy Meet -- Canadian Commentary

(RTTNews) - Canadian stocks soared to end over 2.5 percent higher Wednesday, on some positive market sentiment as investors viewed the Federal Reserve's monetary policy statement as putting off an anticipated interest rate hike until late next year.

The gains were led by the energy sector, with all major components of the main index ending in positive territory. The upsurge comes amid a slew of merger and acquisition news, in the wake of Talisman's buyout by European giant Repsol.

Several stocks from mining and financial sections are up on bargain hunting, contributing substantially to market's impressive uptick.

Investors also digested a mixed batch of economic data from Canada and the U.S., even as the U.S. Federal Reserve maintained interest rates at near-zero levels, while indicating that it can be patient with regard to rate hikes. In essence, it was a Fed reassurance to markets that it will take its time before withdrawing any further support for the recovering economy.

The benchmark S&P/TSX Composite Index closed Wednesday at 14,213.39, up 351.87 points or 2.54 percent. The index scaled an intraday high of 14,226.97 and a low of 13,831.80.

On Tuesday, the index ended at 12,861.52, up 156.38 points or 1.14 percent, after scaling an intraday high of 14,056.85 and a low of 13,270.78.

Crude oil ended higher after the official weekly oil report from the Energy Information Administration showed crude oil stockpiles in the U.S. to have dropped, albeit less than expected.

A weekly report from the U.S. Energy Information Administration showed U.S. crude oil inventories to have dropped by 0.85 million barrels in the week ended December 12, while analysts expected a decline of 2.36 million barrels. The report showed U.S. crude oil inventories at 379.9 million barrels, end last week.

Gasoline stocks jumped by 5.25 million barrels last week, while analysts anticipated a gain of 1.78 million barrels.

The Energy Index soared 7.29 percent, with U.S. crude oil futures for January delivery gaining $0.54 or 1.0 percent to close at $56.47 a barrel a barrel on the Nymex Wednesday.

Husky Energy (HSE.TO) jumped 10.47 percent, after trimming its 2015 capital budget to $3.4 billion, about $1.7 billion less than it expects to spend this year.

Penn West Petroleum Ltd (PWT.TO) gained 7.87 percent, after reducing its capital budget for 2015 by about $215 million from $840 million to $625 million.

Pacific Rubiales Energy Corp. (PRE.TO) surged 20.07 percent after executing definitive deals to sell nearly 43% of its stake in Pacific Midstream Ltd., holding certain of the company's pipeline and power transmission assets, for $320 million.

Eagle Energy Trust (EGL.UN.TO) gained 4.44 percent. The company's subsidiary, Eagle Energy Canada Inc., has signed a purchase and sale agreement with Spyglass Resources Corp. (SGL.TO) to acquire a 50 percent non-operated working interest in producing petroleum properties, for a purchase price of C$100 million.

Talisman Energy Inc. (TLM.TO) added 0.68 percent, after the company entered into a definitive agreement to be acquired by Spanish oil major Repsol S.A. (REPYY.PK).

Encana Corp. (ECA.TO) gained 4.68 percent, while Ecopetrol S.A. (ECP.TO) inched up 0.23 percent.

Among other energy stocks, Western Energy Services Corp. (WRG.TO) gained 6.82 percent, Canadian Natural Resources Limited (CNQ.TO) added 6.18 percent, and Suncor Energy Inc. (SU.TO) jumped 8.18 percent.

Cenovus Energy Inc. (CVE.TO) jumped 9.99 percent, Imperial Oil Limited (IMO.TO) moved up 4.46 percent, Crescent Point Energy Corp. (CPG.TO) surged 10.03 percent, and Enbridge Inc. (ENB.TO) moved up 0.99 percent. Baytex Energy Corp. (BTE.TO) surged 14.56 percent.

Gold futures ended a tad higher after having fallen sharply in the previous session ahead of the Federal Reserves monetary policy meet outcome.

The Global Gold Index jumped 5.67 percent, with gold for February delivery inching up $0.20 percent to settle at $1,194.50 an ounce on the New York Mercantile Exchange Wednesday.

In the gold space, Barrick Gold Corp. (ABX.TO) added 4.66 percent, Agnico Eagle Mines Limited (AEM.TO) jumped 6.21 percent, Goldcorp Inc. (G.TO) gathered 5.06 percent, Eldorado Gold Corp. (ELD.TO) added 6.89 percent, and Franco-Nevada Corp. (FNV.TO) gathered 3.91 percent.

The Capped Materials Index surged 4.51 percent, mostly on sharply rising gold stocks, with Potash Corp. of Saskatchewan Inc. (POT.TO) adding 3.08 percent.

The heavyweight Financial Index gained 1.28 percent, as Bank of Nova Scotia (BNS.TO) gathered 1.24 percent, National Bank of Canada (NA.TO) added 2.41 percent, and Toronto-Dominion Bank (TD.TO) advanced 1.09 percent.

Royal Bank of Canada (RY.TO) gained 1.33 percent, while Bank of Montreal (BMO.TO) added 0.62 percent. Canadian Imperial Bank of Commerce (CM.TO) gathered 0.87 percent.

The Healthcare Index added 2.32 percent, as Valeant Pharmaceuticals International, Inc. (VRX.TO) gained 2.16 percent, Catamaran Corp. (CCT.TO) moved up 1.49 percent, and Extendicare Inc. (EXE.TO) improved 3.60 percent.

The Diversified Metals & Mining Index surged 6.64 percent, as Teck Resources Limited (TCK.B.TO) soared 10.39 percent, First Quantum Minerals Ltd. (FM.TO) gained 3.65 percent, Lundin Mining Corp. (LUN.TO) jumped 6.23 percent, and Finning International Inc. (FTT.TO) added 2.80 percent.

A nickel producer in Cuba, Sherritt International Corp. (S.TO) stock surged 26.21 percent after the U.S. lifted restrictions on Cuba with speculations the move would benefit the company.

Hudson's Bay Co. (HBC.TO) added 0.46 percent, after announcing the appointment of Gerald Storch as Chief Executive Officer, effective January 6, 2015. Storch, who is credited with a 30-year career in retail leadership and management consulting, led Toys"R"Us into a $13 billion global retailer.

Coeur Mining Inc. (CDM.WT.TO) said it has entered into a merger agreement to acquire Paramount Gold and Silver Corp. (PZG.TO) in an all-stock transaction valued at $146 million. Shares of Paramount Gold and Silver Corp. (PZG.TO) soared 29.49 percent.

The Capped Industrials Index gained 2.30 percent, even as Bombardier Inc. (BBD.B.TO) added 2.95 percent, Canadian National Railway Company (CNR.TO) gained 2.10 percent, and Air Canada (AC.TO) dipped 0.41 percent.

The Information Technology Index gathered 1.88 percent, with BlackBerry Ltd. (BB.TO) jumping 5.31 percent, Descartes Systems Group Inc. (DSG.TO) up 1.12 percent, and Avigilon Corp. (AVO.TO) gaining 3.78 percent.

The Capped Telecommunication Index added 0.67 percent, with (BCE.TO) adding 0.43 percent, Rogers Communications Inc. (RCI.B.TO) gaining 0.65 percent, and TELUS Corp. (T.TO) up 0.71 percent.

On the economic front, a report from Statistics Canada showed Canadian wholesale sales to have risen by a seasonally adjusted 0.1 percent in November, falling well short of forecast. In October wholesale sales had risen 1.8 percent.

In economic news from the U.S., a Labor Department report showed consumer price index to have dropped by 0.3 percent in November, after coming in unchanged in October. Economists expected the index to edge down by 0.1 percent.

The U.S. Federal Reserve, at the end of its two-day Federal Open Market Committee policy meet on Wednesday said it will be "patient" in determining when to raise interest rates, a subtle change in language from its previous vow to keep rates near zero for a "considerable time."

In economic news from eurozone, inflation came in line with flash estimate in November at a five-year low, final data from Eurostat showed. Annual inflation came in at 0.3 percent in November, down from 0.4 percent in October. A year ago, the rate was at 0.9 percent. The November inflation matched flash estimate released on November 28.

From Europe, the unemployment rate in U.K. eased to a 6-year low in the three months to October and earnings growth exceeded inflation, boosting scope for strong private spending in coming months. The jobless rate dropped to 6 percent during August to October from 6.2 percent seen in the May to July period, the Office for National Statistics reported Wednesday. Economists had forecast a rate of 5.9 percent. This was the lowest since late 2008.

Meanwhile, Bank of England policymakers decided to leave its key interest rate at a historic low of 0.50 percent in a split vote for the fifth straight time at the meeting held on December 3 and 4. The central bank also unanimously decided to maintain its asset purchase program at GBP 375 billion.

The Asian Development Bank downgraded its growth outlook for Developing Asia as momentum slowed in the second half of 2014, the Manila-based Asian Development Bank said Wednesday. The bank said the region will grow 6.1 percent in 2014 instead of 6.2 percent estimated in September.

The ADB revised China's growth forecast down to 7.4 percent in 2014 from 7.5 percent, and to 7.2 percent from 7.4 percent for 2015. For India, the bank maintained a 5.5 percent growth outlook for FY2014, while indicating the government should extend efforts to reach the 6.3 percent growth estimate in FY2015.