TSX Ends Slightly Lower On Gold Stocks -- Canadian Commentary

(RTTNews) - Canadian stocks edged down to end a shade lower on Friday, driven by weakness in gold stocks with continued focus on the deteriorating situation in Iraq and investors digesting some data showing Canadian inflation to have increased and a better than expected retail sales for April.

The gains in energy stocks, tracking higher crude oil prices, were offset by weakness in gold stocks due to profit taking following a rapid rise in gold prices.

Investors continued to monitor the volatile situation in Iraq with reports of some fierce fighting between government forces and militants for control of the Beiji oil refinery and Tal Afar airport this morning. Meanwhile, President Barack Obama has decided to deploy US military personnel to advise the Iraqi security forces, while making it clear that Iraq's problems cannot be resolved through American action or through military force alone.

The S&P/TSX Composite Index closed Friday at 15,109.10, down 3.12 points or 0.02 percent. The index scaled an intraday high of 15,124.89 and a low of 15,086.62, edging closer to its all-time high of 15,154.77 recorded on June 6, 2008.

Crude oil ended higher after the situation in Iraq continued to deteriorate with increasing concerns over disruption in oil supplies even as the ongoing conflict between militants and government forces intensified.

The Energy Index gained 0.57, with U.S. crude oil futures for July delivery, the most actively traded contract, gaining $0.83 or 0.8 percent to close at $107.30 a barrel Friday on the Nymex.

Among energy stocks, Canadian Natural Resources Ltd. (CNQ.TO) added 1.59 percent, Talisman Energy Inc. (TLM.TO) added 0.52 percent, Suncor Energy Inc.(SU.TO) gained 0.28 percent, Cenovus Energy Inc. (CVE.TO) up 0.80 percent, and Encana Corp. (ECA.TO) surrendered 0.75 percent.

The Financial Index gained 0.07 percent with Royal Bank of Canada (RY.TO) down 0.17 percent, Toronto-Dominion Bank up 0.15 percent, Bank of Montreal (BMO.TO) gained 0.28 percent, and Bank of Nova Scotia (BNS.TO) added 0.17 percent.

The Capped Healthcare Index added 1.16 percent with Extendicare Inc. (EXE.TO) down 0.54 percent, while Valeant Pharmaceuticals International, Inc. (VRX.TO) down 3.78 percent.

Gold futures ended a tad higher following yesterday's surge of more than three percent, with the Federal Reserve's assurance to hold rates at a record low for an extended period and amid the ongoing escalating violence in Iraq.

The Global Gold Index dropped 1.51 percent, with gold futures for August delivery adding $2.50 or 0.2 percent to close at $1,316.60 an ounce Thursday on the Nymex.

Among other gold stocks, B2Gold Corp. (BTO.TO) dipped 0.65 percent, Yamana Gold Inc. (YRI.TO) surrendered 3.26 percent, Kinross Gold Corporation (K.TP) down 3.13 percent and Barrick Gold Corp. (ABX.TO) down 1.95 percent.

The Capped Materials Index surrendered 1.12 percent, with Potash Corp. of Saskatchewan Inc. (POT.TO) down 0.39 percent.

The Diversified Metals & Mining Index added 0.26 percent, with Lundin Mining Corp. (LUN.TO) down 0.36 percent, First Quantum Minerals Ltd. (FM.TO) up 0.42 percent, and Teck Resources Limited (TCK.B.TO) was down 0.74 percent.

The Information Technology Index edged down 0.05 percent, with BlackBerry Limited (BB.TO) surging 6.81 percent after having reported a first-quarter profit yesterday.

Among other tech stocks, CGI Group Inc. (GIB.A.TO) slipped 0.44 percent, Constellation Software Inc. (CSU.TO) dropped 1.46 percent, and Avigilon Corp. (AVO.TO) dived 4.19 percent.

The Capped Industrials Index dropped 0.15 percent, with Bombardier Inc. (BBD.B.TO) up 0.52 percent and Air Canada (AC.B) down 0.63 percent.

Petroamerica Oil Corp. (PTA.V.TO) shares dipped 5.48 percent after announcing it has increased its offer to acquire all of the issued and outstanding common shares of Suroco Energy Inc. (SRN.V.TO) to a value of C$0.80 per Suroco Share. Suroco Energy is up 11.59 percent.

On the economic front, Statistics Canada said annual inflation rose to 2.3 percent in May, up from 2 percent in the previous month. It was the largest jump in headline inflation since February 2012.

Meanwhile, Canadian retail sales were up by a more than expected 1.1 percent in May, from a revised 0.2 percent in April. Economists expected retail sales to rise 1 percent.

In economic news from Europe, U.K.'s budget deficit widened more-than-expected in May as income receipts remained weak, signs the robust economic recovery failed to support public finance. Excluding the temporary effects of financial interventions, public sector net borrowing increased to GBP 13.3 billion from GBP 12.6 billion last year, the Office for National Statistics said Friday. The deficit was forecast to fall to GBP 8.7 billion.

Germany's leading index rose slightly in April, after holding steady in the previous month, a survey by the Conference Board showed Friday. The Conference Board leading economic index rose 0.2 percent monthly in April. The March outcome was revised to flat from the originally reported 0.3 percent rise.