TSX Ends Sharply Lower On Global Cues, Commodities -- Canadian Commentary

(RTTNews) - Canadian stocks plunged to end sharply lower on Tuesday, tracking massive declines in global equity markets, as the Volkswagen emission saga and weakness in commodity prices weighed down markets.

The plunge comes following yesterday's solid gain and a light day for economic data. Global markets were also impacted over the continued uncertainty linked to rate hikes by the U.S. Federal Reserve.

Markets in Europe ended sharply lower, led by auto stocks on concerns over Germany's Volkswagen emission norms violation in the U.S. Earlier today, the auto giant admitted to manipulating emission tests norms for diesel cars in the U.S. Talks that the European Central Bank is preparing to scale up monetary stimulus did little to stem the decline.

U.S. stocks ended firmly in the red, mainly due the ongoing uncertainty about the outlook for U.S. monetary policy. After the Federal Reserve decision to leave interest rates unchanged last week, investors question as to when the central bank will eventually raise rates.

While some analysts believe the Fed will hike rates at its meeting next month, others anticipate the rate increase to be delayed until December.

U.S. stock markets ended in the red with all major averages in negative territory. The Dow ended 1.1 percent lower, the Nasdaq dropped 1.5 percent, and the S&P 500 shed 1.2 percent.

The benchmark S&P/TSX Composite Index closed Tuesday at 13,491.09, down 288.35 points or 2.09 percent. The index scaled an intraday high of 13,646.13 and a low of 13,452.51.

On Monday, the index closed up 135.54 points or 0.97 percent, at 13,779.44, having scaled an intraday high of 13,847.41 and a low of 13,687.09.

The Diversified Metals & Mining Index plunged 4.91 percent, having surrendered 5.02 percent yesterday. First Quantum Minerals (FM.TO) plummeted 8.10 percent, having plunged 9.35 percent yesterday. Teck Resources Limited (TCK-B.TO) plunged 7.65 percent, having surrendered 5.05 percent yesterday.

Lundin Mining Corporation (LUN.TO) dropped 4.94 percent, HudBay Minerals Inc. (HBM.TO) fell 5.87 percent and Sherritt International (S.TO) plunged 8.99 percent after surrendering 5.32 percent yesterday.

The heavyweight Financial Index dived 1.73 percent, as Royal Bank of Canada (RY.TO) dropped 1.68 percent and National Bank of Canada (NA.TO) dipped 0.64 percent.

Toronto-Dominion Bank (TD.TO) fell 2.09 percent, Bank of Nova Scotia (BNS.TO) dropped 1.71 percent, Canadian Imperial Bank Of Commerce dropped 1.23 percent, and Bank of Montreal (BMO.TO) shed 1.60 percent.

Crude oil prices ended lower on demand growth concerns while tracking sharply declining global equity markets and ahead of the weekly crude inventory data amid worries supplies will outstrip demand.

The Energy Index dropped 1.74 percent, with U.S. crude oil futures for November delivery dropping $0.60 or 1.3 percent, to settle at $46.36 a barrel on the New York Mercantile Exchange Tuesday.

Among energy stocks, Crescent Point Energy Corp. (CPG.TO) shed 3.30 percent, Canadian Natural Resources Limited (CNQ.TO) dropped 2.42 percent, and Canadian Oil Sands (COS.TO) dived 4.85 percent.

Cenovus Energy (CVE.TO) lost 2.08 percent, while Baytex Energy Corp. fell 2.82 percent.

Encana Corp. (ECA.TO) dipped 3.46 percent, while Suncor Energy (SU.TO) shed 0.72 percent.

Gold futures ended lower with the dollar ticking higher and in anticipation of a rate hike by the Federal Reserve some time this year.

The Gold Index plunged 4.59 percent, as gold for December delivery fell $8.00 or 0.7 percent, to settle at $1,124.80 an ounce on the New York Mercantile Exchange Tuesday.

Among gold stocks, Yamana Gold Inc. (YRI.TO) dived 7.30 percent, Goldcorp Inc. (G.TO) fell 4.21 percent, and Eldorado Gold (ELD.TO) dropped 4.19 percent.

Kinross Gold Corp. (K.TO) slumped 6.09 percent, while Barrick Gold (ABX.TO) plunged 7.22 percent.

The Capped Materials Index slumped 4.44 percent, as Potash Corp. of Saskatchewan Inc. (POT.TO) plunged 6.47 percent, Agnico Eagle Mines Limited (AEM.TO) dropped 4.32 percent, and Agrium Inc. (AGU.TO) slipped 3.22 percent.

Franco-Nevada Corp. (FNV.TO) fell 3.28 percent, while Silver Wheaton (SLW.TO) dropped 3.34 percent.

The Capped Health Care Index surrendered 3.00 percent, as Valeant Pharmaceuticals International (VRX.TO) plunged 5.39 percent, Extendicare Inc. (EXE.TO) fell 0.25 percent, and Concordia Healthcare Corp. (CXR.TO) plummeted 5.78 percent.

The Capped Information Technology Index shed 1.38 percent, as BlackBerry Limited (BB.TO) fell 0.45 percent, Descartes Systems Group (DSG.TO) moved up 0.29 percent, and Constellation Software (CSU.TO) dropped 1.94 percent.

The Capped Telecommunication Index surrendered 1.17 percent, as Rogers Communication (RCI-B.TO) fell 1.31 percent, BCE Inc. (BCE.TO) shed 2.04 percent, and TELUS Corp. (T.TO) dropped 0.91 percent. Manitoba Telecom Services Inc. (MBT.TO) slipped 0.45 percent.

The Capped Industrials Index lost 1.65 percent, as Bombardier (BBD-B.TO) dropped 1.14 percent, Finning International Inc. (FTT.TO) fell 0.90 percent, and Air Canada shed 2.28 percent.

Canadian Pacific Railway (CP.TO) fell 3.17 percent and Canadian National Railway (CNR.TO) dropped 2.66 percent, after the Globe and Mail reported an employee of Canadian National Railway is being accused of sharing secret customer information with Canadian Pacific Railway.

AltaGas (ALA.TO) declined 4.08 percent after the company announced entering into a purchase and sale agreement with Highstar Capital IV, L.P. and certain of its affiliates to acquire GWF Energy Holdings LLC, which holds a portfolio of three natural gas-fired electrical generation facilities in northern California, for US$642 million.

Tecsys (TCS.TO) dropped 2.17 percent, after announcing some European expansion initiatives.

On the economic front, a leading economic index for the Chinese economy advanced sharply in August, the latest survey from the Conference Board showed on Tuesday. The index advanced 1.0 percent, following the 0.9 percent increase in July and the 0.5 percent gain in June.

Germany's real wages grew at its fastest pace on record in the second quarter, data from Destatis revealed Tuesday. Real wages advanced 2.7 percent in the second quarter from last year, and was the fastest growth since the series began in 2008. Wages increased 2.5 percent in the first quarter.

U.K. budget balance showed its biggest shortfall for August in three years as tax revenue declined from last year, data from the Office for National Statistics showed Tuesday. Public sector net borrowing excluding public sector banks increased by GBP 1.4 billion from last year to GBP 12.1 billion in August.

This was the largest deficit for August since 2012. Economists had forecast the deficit to widen to GBP 9.2 billion.