TSX Plunges To End Over 2% Lower On Global Cues -- Canadian Commentary

(RTTNews) - Canadian stocks plunged over 2 percent to end lower for a fourth straight session Thursday, on cue from sharply declining global equity markets, hit particularly hard after some dovish Fed Reserve minutes yesterday, collapse in oil prices and concerns over the global economy.

The majority of the Canadian sectors are ended in the red, with the exception of the gold and mining sectors. Energy stocks ended sharply lower, with crude oil prices hovering around six-year lows, near just $40 a barrel. However, gold prices continue to rebound, due to its safe haven appeal.

Markets in Europe ended sharply lower. Concerns over a hard landing in China, and apprehension about an interest rate hike in the U.S. has dampened investor sentiment.

Meanwhile, the European Stability Mechanism disbursed 13 billion euros to Greece after Eurozone finance ministers approved the third bailout during a conference call. Athens reportedly honored a 3.2 billion euros debt repayment to the European Central Bank on Thursday.

Markets in the United States were also under pressure, ending sharply lower. With the sell-off, the Dow fell to its lowest closing level in nearly ten months. Investor sentiment has been hit by ongoing concerns about the situation in China, with China's Shanghai Composite Index indicating a substantial move back to the downside, plummeting by 3.4 percent after jumping 1.2 percent on Wednesday.

In some positive economic data, existing home sales in the U.S. continued to grow unexpectedly in July, with sales climbing to its highest level in well over eight years, a report from the National Association of Realtors revealed Thursday.

A Federal Reserve Bank of Philadelphia report on Thursday showed its index of current activity in the sector rose more than expected in August, indicating an acceleration in the pace of growth in regional manufacturing activity.

However, initial claims for unemployment benefits in the U.S. disappointed after a Labor Department report showed an unexpected uptick in claims in the week ended August 15. The uptick comes after some modest increases in first-time claims for U.S. unemployment benefits over the past few weeks.

The benchmark S&P/TSX Composite Index closed Thursday at 13,737.00, down 299.63 points or 2.13 percent. The index scaled an intraday high of 14,022.14 and a low of 13,736.96.

On Wednesday, the index closed down 157.24 points or 1.11 percent, at 14,036.63. The index scaled an intraday high of 14,187.62 and a low of 14,013.99.

Crude oil futures ended higher mostly on bargain hunting with the dollar trending lower against some major currencies. Crude prices have been under pressure over fears of a supply glut with unexpected increase seen in weekly stockpiles and concerns over the Chinese economy.

The Energy Index dived 2.60 percent, with U.S. crude oil futures for October delivery, the most actively traded contract, added $0.05 or 0.1 percent, to settle at $41.32 a barrel on the New York Mercantile Exchange Thursday.

Crescent Point Energy Corp. (CPG.TO) shed 4.48 percent, while Suncor Energy Inc. (SU.TO) dropped 2.67 percent. Encana Corp. (ECA.TO) dropped 3.28 percent, Baytex Energy Corp. (BTE.TO) plummeted 6.62 percent, and Canadian Natural Resources Limited (CNQ.TO) fell 2.72 percent.

The Diversified Metals & Mining Index inched up 0.08 percent, as First Quantum Minerals (FM.TO) slipped 3.93 percent, Teck Resources Limited (TCK-B.TO) gained 0.47 percent, HudBay Minerals Inc. (HBM.TO) added 0.60 percent, and Sherritt International Corp. (S.TO) advanced 1.94 percent.

Gold futures ended higher on its safe haven appeal after global equity markets witnessed a massive sell-off with some dovish minutes from the Federal Reserve and China in focus.

The Gold Index jumped 3.86 percent, with gold for December delivery surging $25.30 or 2.2 percent, to settle at $1,153.20 an ounce on the New York Mercantile Exchange Thursday.

Among gold stocks, Kinross Gold Corp. (K.TO) added 3.31 percent, Barrick Gold Corp. (ABX.TO) jumped 4.16 percent, Goldcorp Inc. (G.TO) added 2.07 percent, and Yamana Gold Inc. (YRI.TO) gathered 5.35 percent. Eldorado Gold Corp. (ELD.TO) gained 2.76 percent.

The Capped Materials Index gained 0.49 percent, mainly on the strength of gold stocks. Agrium Inc. (AGU.TO) shed 2.78 percent, while Agnico Eagle Mines Limited (AEM.TO) gathered 2.78 percent. Potash Corp. of Saskatchewan Inc. (POT.TO) dropped 2.52 percent.

Franco-Nevada (FNV.TO) gained 3.80 percent, and Silver Wheaton (SLW.TO) slipped 0.16 percent.

The heavyweight Financial Index plunged 1.89 percent, as National Bank of Canada (NA.TO) dropped 1.49 percent, Bank of Montreal (BMO.TO) jumped 2.76 percent, and Royal Bank of Canada (RY.TO) dived 2.22 percent.

Toronto-Dominion Bank (TD.TO) fell 1.96 percent, Bank of Nova Scotia (BNS.TO) fell 2.17 percent, and Canadian Imperial Bank of Commerce (CM.TO) dipped 1.60 percent.

The Capped Health Care Index plunged 4.94 percent as Extendicare Inc. (EXE.TO) dropped 3.59 percent, and Concordia Healthcare Corp. (CXR.TO) fell 3.57 percent.

Valeant Pharmaceutical International (VRX.TO) plunged 6.70 percent, after agreeing to acquire Sprout Pharmaceuticals for approximately $1 billion in cash.

The Capped Information Technology Index declined 1.89 percent, as BlackBerry Limited (BB.TO) slipped 1.73 percent.

Among other tech stocks, Sierra Wireless (SW.TO) fell 5.87 percent, Descartes Systems Group (DSG.TO) declined 0.72 percent, and Avigilon Corp. (AVO.TO) dropped 1.30 percent.

The Capped Telecommunication Index shed 0.66 percent, as Rogers Communication (RCI-B.TO) fell 0.89 percent, TELUS Corp. (T.TO) dropped 1.30 percent, Manitoba Telecom Services Inc. (MBT.TO) moved up 0.42 percent and BCE Inc. (BCE.TO) shed 0.85 percent.

The Capped Industrials Index fell 2.24 percent, even as Bombardier (BBD.B.TO) jumped 6.72 percent and Finning International Inc. (FTT.TO) dipped 3.03 percent.

Canadian Pacific Railway (CP.TO) shed 3.49 percent, while Canadian National Railway (CNR.TO) lost 1.84 percent. AutoCanada (ACQ.TO) added 0.42 percent.

On the economic front, data from Statistics Canada showed that Canada wholesale sales rose 1.3 percent to C$55.3 billion in June, reversing the 1.0 percent decline recorded in May. Economists were expecting the sales to increase to 1.0 percent.

From the U.S., a Labor Department report on Thursday said initial jobless claims in the week ended August 15 crept up to 277,000, an increase of 4,000 from the previous week's revised level of 273,000. Economists expected jobless claims to edge down to 270,000 from the 274,000 originally reported for the previous week.

Existing home sales in the U.S. unexpectedly saw continued growth in July, with sales climbing to their highest level in well over eight years, a report from the National Association of Realtors revealed Thursday.

NAR said existing home sales climbed 2.0 percent to an annual rate of 5.59 million in July from a downwardly revised 5.48 million in June. Economists expected existing home sales to drop to a rate of 5.40 million from the 5.49 million originally reported for the previous week.

A Federal Reserve Bank of Philadelphia report on Thursday showed its index of current activity in the sector rose more than expected in August, indicating an acceleration in the pace of growth in regional manufacturing activity.

The Philly Fed said its diffusion index of current activity increased to 8.3 in August from 5.7 in July, with a positive reading indicating growth in regional manufacturing activity. Economists expected the index to climb to 7.5.

A Conference Board report on Thursday showed an unexpected decrease in its index of leading U.S. economic indicators, partly reflecting a sharp drop in housing permits.

The Conference Board said the leading economic index fell by 0.2 percent in July following a 0.6 percent increase in June. Economists expected the index to rise by 0.2 percent.

Germany's producer prices dropped at a slightly slower pace as expected in July, data from Destatis revealed Thursday. Producer prices decreased 1.3 percent year-on-year in July, following a 1.4 percent drop in June. The annual pace of decline matched expectations. Producer prices have been falling since August 2013.

U.K. retail sales expanded in July, but at a slower than expected pace as auto fuel sales dropped at the fastest pace in four months, data from the Office for National Statistics showed Thursday. Retail sales including auto fuel gained 0.1 percent month-on-month in July, reversing a revised 0.1 percent drop in June. Nonetheless, it was slower than the expected growth of 0.4 percent.

British manufacturers' order books recovered in August, the monthly Industrial Trends Survey from the Confederation of British Industry showed Thursday. The order book balance rose to -1 percent in August from -10 in July. It was better than the expected score of -10 percent.