Canadian Stocks Rally On Talisman Buyout -- Canadian Commentary

(RTTNews) - Canadian stocks are rising Tuesday morning, riding on gains in the energy section on the back of a lucrative buyout of Talisman Energy.

With the news about Talisman's buyout lifting sentiment, investors are shrugging off another sharp slide in crude oil prices and some downbeat economic data from the U.S. and China.

Meanwhile, markets are awaiting the outcome of the U.S. Federal Reserve's monetary policy meeting that will conclude on Wednesday, for clues on U.S. interest rate hikes.

The benchmark S&P/TSX Composite Index is up 185.17 points or 1.34 percent at 13,890.31, after advancing to 13,928.76.

On Monday, the index ended down 25.91 points or 0.19 percent at 13,705.14, after scaling an intraday high of 13,852.14 and a low of 13,635.53.

The Energy Index is up over 5 percent, with Talisman Energy (TLM.TO) soaring nearly 50 percent after the company entered into a definitive agreement to be acquired by Spanish oil major Repsol S.A. (REPYY.PK) for a total transaction value of about $13 billion, including Talisman's debt. Talisman shareholders will receive $8, or C$9.33, in cash for each share they own -- a 60 percent premium to Talisman's 30-day weighted average price.

Encana Corp. (ECA.TO) is moving up nearly 6 percent after announcing that it has budgeted US$2.7 billion - US$2.9 billion for capital spending next year, targeting four areas - two in Western Canada and two in the southern United States.

Crescent Point Energy Corp. (CPG.TO) is up 12 percent. ARC Resources Ltd. (ARX.TO) and Tourmaline Oil Corp. (TOU.TO) 6.5 percent and 5 percent, respectively. Suncor Energy Inc. (SU.TO), Canadian Natural Resources Limited (CNQ.TO) and Husky Energy Inc. (HSE.TO) are advancing 2 to 3.5 percent, while Cenovus Energy Inc. (CVE.TO) and Imperial Oil Limited (IMO.TO) are up 1.5 percent and 1.3 percent, respectively.

Penn West Petroleum (PWT.TO), Enerplus Corporation (ERF.TO), Baytex Energy Corp. (BTE.TO), Long Run Exploration (LRE.TO), Bankers Petroleum (BNK.TO), Canadian Oil Sands (COS.TO), Legacy Oil + Gas (LEG.TO), Raging River Exploration Inc (RRX.TO) and Precision Drilling Corporation (PD.TO) are rising 4 to 13 percent.

Meanwhile, Ecopetrol S.A. (ECP.TO) is down 5.5 percent, after the company announced that its board has approved an investment plan for 2015 of US$7.86 billion.

The Financial Index is up 0.5 percent. Among big six banks, Canadian Imperial Bank of Commerce (CM.TO) is down marginally, while the rest are up 0.3 to 0.7 percent.

Power Corporation of Canada (POW.TO) and Manulife Financial Corporation (MFC.TO) are moving up by about 1 percent and Sun Life Financial Inc. (SLF.TO) is modestly higher.

Meanwhile, Fairfax Financial Holdings (FFH.TO) is declining 0.4 percent. Fairfax Financial Holdings said it has entered into an agreement with QBE Insurance (Europe) Limited to acquire QBE's insurance operations in the Czech Republic, Hungary and Slovakia.

The Industrials Index is up 0.7 percent. Air Canada (AC.TO), Progressive Waste Solutions Ltd. (BIN.TO), CAE Inc. (CAE.TO), Finning International Inc. (FTT.TO) and SNC-Lavalin Group Inc. (SNC.TO) are up 0.5 to 1 percent, while MacDonald, Dettwiler and Associates Ltd. (MDA.TO) and Canadian National Railway Company (CNR.TO) are moving up 1.7 percent and 1.3 percent, respectively.

The Capped Materials Index is up 0.75 percent. Eldorado Gold Corporation (ELD.TO) is rising over 4 percent, Agnico Eagle Mines Limited (AEM.TO) is up almost 3 percent, Franco-Nevada Corporation (FNV.TO) is gaining 2.5 percent and Goldcorp Inc. (G.TO) is adding 1.2 percent.

The Diversified Metals & Mining Index is up 0.3 percent. Nevsun Resources Ltd. (NSU.TO), Capstone Mining Corp. (CS.TO), Turquoise Hill Resources Ltd. (TRQ.TO), Lundin Mining Corporation (LUN.TO), Sherritt International Corporation (S.TO) and HudBay Minerals Inc. (HBM.TO) are up 1 to 2.5 percent, while First Quantum Minerals Ltd. (FM.TO) is declining 3.4 percent.

In commodities, crude oil futures for January delivery are down $0.97 or 1.73 percent at $54.94 a barrel.

Natural gas for January is down $0.050 or 1.43 percent at $3.670 per million btu.

Gold futures for February are down $12.10 or 1.00 percent at $1,195.60 an ounce.

Silver for March is down $0.801 or 4.84 percent at $2 percent at $15.762 an ounce. Meanwhile, copper is down $0.027 or 0.93 percent at $2.852 per pound.

In economic news from the U.S., a closely-watched measure of confidence among U.S. home builders ticked down this month by one point to 57, according to data released by National Association of Home Builders/Wells Fargo. September's score of 59 was a nine-year peak.

In Asia, the results of a survey by Markit and HSBC showed a contraction in manufacturing activity in China in December. The flash manufacturing purchasing managers' index fell to 49.5 from 50 in November.

Meanwhile, from eurozone, results for a survey by Markit Economics showed eurozone private sector to have expanded slightly more-than-expected in December, with the zone's composite output advancing to 51.7.

However, activity growth in Germany slowed to an 18-month low due to lower order intakes and recent airline and rail strikes. At the same time, the French private sector contracted at a slower pace in December.