TSX Ends Higher As Global Equity Markets Rally -- Canadian Commentary

(RTTNews) - Canadian stocks ended sharply higher for a second straight session on Wednesday, after some better than expected Canadian GDP data and strong U.S. private sector job growth kept investor sentiment up, even as most global equity markets made significant gains.

The rally was led by gains in almost all sectors with strength in healthcare, financial, and mining stocks with telecom ending in the red.

It was a soft quarter for global equities amid the slowdown worldwide led by China, even as the U.S. Federal Reserve continued to search for the right time to hike interest rates.

Healthcare stocks led the way, rebounding strongly after having been bruised badly in the last couple of days on calls for action against higher drug pricing. Mining stocks also make strong gains with Anglo-Swiss miner Glencore reassuring investors that it has taken proactive steps to position the company to withstand current commodity market conditions. The announcement brought calm to miners globally, after a few volatile sessions.

Canada's gross domestic product grew more than forecast in July, as the economy stabilized following the big drop in crude oil prices earlier in the year. GDP rose 0.3 percent to an annualized $1.66-trillion, Statistics Canada said, compared to a revised 0.4 percent increase in June. Economists expected an increase of 0.2 percent.

Markets in Europe ended solidly in positive territory, with the announcement from Glencore providing a boost to the European mining sector.

United States markets also ended higher with the major averages settling firmly in positive territory. after the mixed performance yesterday, as investors were reassured after the stronger than expected private sector employment growth.

In some encouraging economic news, a report from payroll processor ADP on Wednesday showed stronger than expected private sector jobs growth in September, reflecting impressive growth at large businesses.

However, a report from MNI Indicators showed an unexpected contraction in Chicago-area business activity in September, with production growth collapsing and new orders falling sharply.

The benchmark S&P/TSX Composite Index closed Wednesday at 13,306.96, up 270.00 points or 2.07 percent. The index scaled an intraday high of 13,310.55 and a low of 13,135.19.

On Tuesday, the index closed up 36.72 points or 0.28 percent, at 13,041.30. The index scaled an intraday high of 13,111.38 and a low of 12,964.12.

The Capped Health Care Index surged 6.50 percent, with Valeant Pharmaceuticals International (VRX.TO) soaring 12.33 percent, amid accusations of huge drug price increases.

Concordia Healthcare Corp. (CXR.TO) surged 17.94 percent, having plunged 15.37 percent yesterday, under pressure with over pricing of its drugs from the U.S. Extendicare Inc. (EXE.TO) gained 0.63 percent.

Gold futures ended lower amid some upbeat economic data from the U.S. with private sector jobs rising more than expected in September and the dollar trending higher.

However, the Gold Index gained 1.98 percent, although gold for December delivery dropped $11.60 or 1.0 percent, to settle at $1,115.20 an ounce on the New York Mercantile Exchange Wednesday.

Among gold stocks, Yamana Gold Inc. (YRI.TO) gained 2.27 percent, Goldcorp Inc. (G.TO) added 2.20 percent, and Barrick Gold (ABX.TO) gathered 1.80 percent.

Kinross Gold Corp. (K.TO) rose 2.65 percent, while Eldorado Gold (ELD.TO) surged 5.94 percent.

The Capped Materials Index moved up 1.59 percent, as Potash Corp. of Saskatchewan Inc. (POT.TO) gained 0.66 percent, Agnico Eagle Mines Limited (AEM.TO) rose 2.24 percent, Agrium Inc. (AGU.TO) moved up 0.97 percent and Franco-Nevada Corp. (FNV.TO) advanced 2.39 percent.

The Diversified Metals & Mining Index added 2.54 percent, as First Quantum Minerals (FM.TO) jumped 5.16 percent and Teck Resources Limited (TCK-B.TO) moved up 0.95 percent.

Lundin Mining Corporation (LUN.TO) added 2.45 percent, while HudBay Minerals Inc. (HBM.TO) added 0.61 percent.

The heavyweight Financial Index jumped 1.96 percent, as Royal Bank of Canada (RY.TO) jumped 2.49 percent and National Bank of Canada (NA.TO) moved up 1.74 percent.

Toronto-Dominion Bank (TD.TO) gained 2.27 percent, Bank of Nova Scotia (BNS.TO) moved up 1.41 percent, Canadian Imperial Bank Of Commerce added 2.38 percent, and Bank of Montreal (BMO.TO) jumped 2.90 percent.

Crude oil prices ended lower after a report from the U.S. Energy Information Administration showed an increase in crude stockpiles last week, although domestic production declined due to the refinery maintenance season.

Data from the U.S. Energy Information Administration showed crude stockpiles in the U.S. to have climbed 4.0 million barrels in the week ended September 25, while analysts anticipated an increase 0.1 million barrels. Total U.S. crude stockpiles aggregated 457.9 million barrels end last week.

Total domestic production of crude oil for the week dropped 48,000 barrels to about 9.1 million barrels a day.

The Energy Index gained 0.59 percent, with U.S. crude oil futures for November delivery shedding $0.14 or 0.3 percent, to settle at $45.09 a barrel on the New York Mercantile Exchange Wednesday.

Among energy stocks, Crescent Point Energy Corp. (CPG.TO) moved up 1.60 percent, Canadian Natural Resources Limited (CNQ.TO) shed 0.91 percent, and Canadian Oil Sands (COS.TO) gathered 1.45 percent.

Cenovus Energy (CVE.TO) dropped 0.88 percent, while Baytex Energy Corp. jumped 7.83 percent. Encana Corp. (ECA.TO) gathered 1.42 percent, while Suncor Energy (SU.TO) gained 0.54 percent.

The Capped Information Technology Index added 1.32 percent, as BlackBerry (BB.TO) gained 1.11 percent, Descartes Systems Group (DSG.TO) dipped 1.09 percent, and Constellation Software (CSU.TO) moved up 1.46 percent.

The Capped Telecommunication Index dropped 0.60 percent, as TELUS Corp. (T.TO) slipped 0.99 percent, Rogers Communication (RCI-B.TO) fell 0.71 percent and BCE Inc. (BCE.TO) added 0.40 percent.

The Capped Industrials Index gained 1.50 percent, as CAE Inc. (CAE.TO) jumped 3.21 percent while Air Canada (AC.TO) moved up 0.37 percent.

Bombardier (BBD-B.TO) dropped 1.18 percent, even as the announced Ryukyu Air Commuter Co., Ltd. as the unidentified airline that had signed a firm purchase agreement for five Q400 turboprop airliners previously announced in July 2014.

Finning International Inc. (FTT.TO) moved up 0.15 percent, while AutoCanada (ACQ.TO) climbed 3.98 percent.

Canadian Pacific Railway (CP.TO) rose 3.26 percent, after it acquired Steelcare Inc, Canada's largest steel transload facility. The financial terms of the deal were not disclosed.

Hudson's Bay (HBC.TO) soared 8.92 percent, having completed the previously announced acquisition of GALERIA Holding.

In economic news, a report from payroll processor ADP on Wednesday showed stronger than expected private sector job growth in September, reflecting strong job growth at large businesses. Private sector employment jumped by 200,000 jobs in September following a downwardly revised increase of 186,000 jobs in August. Economists expected an increase of about 190,000 jobs, which would have matched the job growth originally reported for the previous month.

A report from MNI Indicators on Wednesday showed an unexpected contraction in Chicago-area business activity in September, with production growth collapsing and new orders falling sharply. MNI Indicators said its Chicago business barometer tumbled to 48.7 in September from 54.4 in August, with a reading below 50 indicating a contraction. Economists expected the barometer to decrease to 53.6, which would have still indicated growth.

The euro area unemployment rate remained unchanged at an elevated level in August as businesses generated fewer jobs amid weak economic growth. The jobless rate held steady at double-digit 11 percent in August, data from Eurostat showed Wednesday. The figure was expected to remain at July's originally estimated rate of 10.9 percent.

Eurozone experienced deflation in September for the first time in six months as energy prices decreased further adding pressure on the European Central Bank to initiate more quantitative easing. Consumer prices unexpectedly fell by 0.1 percent year-on-year in September, offsetting a 0.1 percent rise in August, flash data from Eurostat showed Wednesday. Economists had forecast prices to remain flat.

German unemployment increased unexpectedly in September, reports said citing data from the Federal Labor Agency on Wednesday. The number of unemployed increased by 2,000 from August, confounding expectations for a decline of 5,000. At the same time, the jobless rate stood steady at 6.4 percent in September as expected by economists.

Germany's retail sales decreased unexpectedly in August after rising in the previous month, data from Destatis showed Wednesday. Retail sales, in real terms, fell a seasonally and calendar-adjusted 0.4 percent month-over-month in August, confounding economists' expectations for a 0.2 percent increase. In July, sales had risen 1.6 percent.

Germany's unemployment rate dropped marginally in August, figures from Destatis showed Wednesday. The jobless rate dropped to an adjusted 4.5 percent in August from 4.6 percent in the previous month. In the corresponding month last year, the rate was 5.0 percent.

French producer prices continued its downward trend in August largely due to a sharp decrease in refined petroleum product prices, the statistical office INSEE reported Wednesday. Producer prices declined 2.1 percent in August from last year after falling 1.6 percent in July.

France's consumer spending remained unchanged in August, after rising in the previous months, as smaller changes for most of the goods offset each other, statistical office INSEE said Wednesday. Consumer spending in volume remained steady after a 0.3 percent rise in July and 0.4 percent in June.

The U.K. economy grew as initially estimated in the second quarter, data from the Office for National Statistics showed Wednesday. Gross domestic product grew 0.7 percent from the first quarter, unrevised from the second estimate published on August 28. It was faster than the 0.4 percent expansion seen in the first quarter.

U.K. house prices grew at the fastest pace in four months during September, the Nationwide Building Society said Wednesday. House prices increased 3.8 percent year-on-year in September, the fastest since May, when it grew 4.6 percent. The annual growth matched expectations and faster than August's 3.2 percent increase.

Consumer confidence in the United Kingdom was down in September, the latest survey from GfK showed on Wednesday with an index score of +3. That was shy of expectations for +5 and down from +7 in August.