TSX Rallies To End Higher On Gold Stocks -- Canadian Commentary

(RTTNews) - Canadian stocks rebounded to end higher on Wednesday, on some upbeat Canadian housing starts in September with gold stocks trending sharply higher. Investors also tracked some rising U.S. equity markets after minutes from the U.S. Federal Reserve's September meeting showed no pointers to when a rate hike would be introduced.

The main index was led by surging gold mining stocks, and well supported by financial and mining stocks.

Minutes of the September 16-17 meeting released Wednesday, showed members of the U.S. Federal Reserve to be concerned over the global economic weakness and the impact of a stronger U.S. dollar.

Most members wanted the Fed to keep its ultra-accommodative monetary policy in place for now amid mixed signals from the labor and housing markets.

"In their view, the costs of downside shocks to the economy would be larger than those of upside shocks," the minutes read.

Nonetheless, there was disagreement over the Fed's promise to keep interest rates at zero for a "considerable time," with several voting members expressing concerns the term will likely give markets an inaccurate outlook as to when the central bank will hike rates.

The benchmark S&P/TSX Composite Index closed Wednesday at 14,666.47, up 90.02 points or 0.62 percent. The index scaled a intraday high of 14,678.32 and a low of 14,439.62.

On Tuesday, the index ended sharply lower, dragged down by declining commodity prices and investor concerns over the global economy.

Crude oil plunged to end at a 17-month low on demand growth concerns after the IMF cut its global economic growth outlook, even as an official weekly oil report from the Energy Information Administration showed crude stockpiles in the U.S. to have climbed more than expected last week.

The Energy Index shed 0.90 percent, with U.S. crude oil futures for November delivery plummeting $1.54 or 1.8 percent to close at $87.31 on the Nymex Wednesday.

Among energy stocks, Talisman Energy Inc. (TLM.TO) shed 2.72 percent, Husky Energy Inc. (HSE.TO) dropped 2.04 percent, Cenovus Energy Inc. (CVE.TO) shed 1.21 percent, and Canadian Natural Resources Limited (CNQ.TO) surrendered 0.60 percent. Suncor Energy Inc. (SU.TO) dropped 0.75 percent, while Enbridge Inc. (ENB.TO) fell 0.56 percent.

Encana Corporation (ECA.TO) declined 1.18 percent, after an agreement with Ember Resources Inc. to sell the majority of its Clearwater assets located in southern and central Alberta, for about $605 million.

The Financial Index jumped 1.02 percent, with Toronto-Dominion Bank (TD.TO) gaining 0.86 percent, while Canadian Imperial Bank of Commerce (CM.TO) added 1.18 percent. Royal Bank of Canada (RY.TO) jumped 1.66 percent, Bank of Nova Scotia (BNS.TO) gained 1.60 percent, Bank of Montreal (BMO.TO) added 1.56 percent, and National Bank of Canada (NA.TO) added 1.33 percent.

Gold futures ended lower ahead of the the minutes of the U.S. Federal Reserve September monetary policy meeting later in the day, with anticipation the report would provide vital cues as to when the central bank will likely hike rates.

The Global Gold Index gained 7.03 percent, with gold for December delivery shedding $6.40 or 0.5 percent to settle at $1,206.00 an ounce on the New York Mercantile Exchange Wednesday.

Among gold stocks, Barrick Gold Corp. (ABX.TO) surged 4.59 percent, Yamana Gold Inc. (YRI.TO) jumped 6.21 percent, and Eldorado Gold Corp. (ELD.TO) soared 11.05 percent. Goldcorp Inc. (G.TO) jumped 7.93 percent, while B2Gold Corp. (BTO.TO) soared 13.30 percent.

The Capped Materials Index surged 4.17 percent with Potash Corp. of Saskatchewan Inc. (POT.TO) moving up 0.89 percent.

The Diversified Metals & Mining Index gained 1.37 percent, with First Quantum Minerals Ltd. (FM.TO) dropping 0.74 percent, Lundin Mining Corp. (LUN.TO) gained 0.57 percent, and Teck Resources Limited (TCK.B.TO) gathered 2.17 percent.

The Capped Industrials Index fell 0.19 percent, with Bombardier Inc. (BBD.B.TO) ending flat at C$3.60 a share and SNC-Lavalin Group Inc. (SNC.TO) down 1.64 percent.

The Information Technology Index added 0.34 percent, with smartphone maker BlackBerry Limited (BB.TO) down 0.58 percent.

The Healthcare Index gained 1.18 percent, with Valeant Pharmaceuticals International, Inc. (VRX.TO) up 0.02 percent. Catamaran Corporation (CCT.TO) gained 1.63 percent, while Extendicare Inc. (EXE.TO) gathered 1.96 percent.

The Telecom Index moved up 0.14 percent with Rogers Communications Inc. (RCI.B.TO) edging up 0.14 percent and TELUS Corp. (T.TO) adding 0.08 percent.

The Consumer Staples Index gained 1.1 percent, with Alimentation Couche-Tard Inc. (ATD.B.TO) up 1.72 percent and Saputo Inc. (SAP.TO) up 1.48 percent.

Jean Coutu Group (PJC) Inc. (PJC.A.TO) gained 2.38 percent after reporting a second-quarter profit of C$53.6 million or C$0.28 per share, down sharply from C$208.2 million or C$0.98 per share, last year.

Solar power company TerraForm Power, Inc. (TERP) Wednesday said it will acquire the operating portfolio of Hudson Energy Solar Corp., a unit of Just Energy Group (JE.TO), in partnership with SunEdison (SUNE), which will gain the backlog of Hudson Energy. Just Energy shares dived 4.84 percent following the announcement.

MTY Food Group Inc. (MTY.TO) plunged 8.43 percent despite the company reporting a six percent increase in third-quarter net profit.

On the economic front, data released by the Canadian Mortgage and Housing Corporation showed Canadian housing starts to have risen 0.5 percent, more than expected to a seasonally adjusted annual rate of 197,343 units in September, from an upwardly revised 196,283 units in the preceding month.

In other economic news, China's services sector continued to expand in September, albeit at a slower pace with a PMI score of 53.5, a survey from HSBC Bank showed Wednesday. That's down from 54.1 in August, although above the 50 that separates expansion from contraction.

U.K. house prices increased more than expected in September, data from Halifax showed Wednesday. House prices rose 0.6 percent in September from August, when prices remained flat. Economists had forecast a 0.2 percent rise for September. Annually, prices were 9.6 percent higher in the three months to September than in the same three months last year, similar to last month and in line with expectations.

Meanwhile, a survey from Bank of France showed Wednesday the French economy is forecast to grow marginally in the third quarter, even as business confidence weakened in September. Gross domestic product of France is forecast to grow 0.2 percent in the third quarter, unchanged from the previous forecast.

Business confidence in France dropped to 96 in September from 97 in August, while industrial production remained stable in September. Business leaders expect an increase in production in October. The composite index, which covers both manufacturing and services sectors, came in at 52.3, expanding for the fifth straight month but down from the 17-month high of 52.8 in August.

The Organization for Economic Cooperation and Development said Wednesday that its composite leading index signaled mixed outlook to major economies, characterized by weakening growth in the euro area and stable growth in most other major economies. The OECD composite leading index remained unchanged at 100.4 in August. On a yearly basis, the index rose by 0.14 percent.