TSX Ends Lower On Global Growth Concerns, Fed Meet - Canadian Commentary

(RTTNews) - Canadian stocks dived to end at a more than two-week low Monday, tracking declining global equity markets on continued global economic growth concerns after some soft data from China and anxiety over the upcoming U.S. Federal Reserve policy meet that could decide on further tapering of the quantitative easing program.

Some soft economic data from the U.S. with new home sales dropping more than expected in December also fueled investor concerns. The sharp decline was mostly led by Financial and Energy stocks, with almost all major sub-indices in the red, barring the Information Technology sector.

Asian markets tumbled tracking weak leads from the U.S. and European markets Friday, fueled by anxiety over global economic recovery. Investors dumped stocks and currencies in emerging markets, underscoring growing anxiety about the ability of developing countries to prop up their economies amid slowing growth in China and dwindling capital flows as the Federal Reserve begins to suck out excess liquidity out of the system. The European markets also ended in negative territory largely, following weak cues from Asia.

The S&P/TSX Composite Index closed Monday at 13,582.29, down 135.47 points or 0.99 percent. The index scaled an intraday high of 13,717.76 and a low of 13,520.51.

The Global Gold Index dropped 2.59 percent, with gold futures for February delivery, the most actively traded contract, edging down $0.90 or 0.1 percent to close at $1,2263.40 an ounce Monday on the Nymex.

Among gold stocks, Goldcorp Inc. (G.TO) shed 2.52 percent, while Barrick Gold Corp. (ABX.TO) slipped 2.09 percent. Yamana Gold Inc. (YRI.TO) declined 2.74 percent, while Kinross Gold Corp. (K.TO) gave up 2.72 percent.

The Capped Materials Index shed 1.31 percent, with fertilizer giant Potash Corp. of Saskatchewan Inc. (POT.TO) gaining 1.14 percent and Agrium, Inc. (AGU.TO) down 0.58 percent.

U.S. crude oil ended lower after some soft economic data from the U.S., ahead of the two-day U.S. Federal Reserve policy meet beginning Tuesday.

The Energy Index dropped 1.38 percent, with U.S. crude oil futures for March delivery, the most actively traded contract, shedding $0.92 or 1.0 percent to close at $95.72 a barrel Monday on the Nymex.

Among energy stocks, Canadian Natural Resources Limited (CNQ.TO) dropped 0.28 percent, while Suncor Energy Inc. (SU.TO) dropped 1.60 percent. Talisman Energy Inc. (TLM.TO) slipped 1.11 percent, while Encana Corp. (ECA.TO) shed 1.14 percent.

The Information Technology Index gained 0.25 percent, although smartphone maker BlackBerry Limited (BB.TO) dropped 0.91 percent.

The Diversified Metals & Mining Index slipped 0.28 percent, with Teck Resources Limited (TCK.B.TO) up 1.01 percent and First Quantum Minerals Ltd. (FM.TO) edging up 0.10 percent. Lundin Mining Corp. (LUN.TO) dropped 0.20 percent.

The heavyweight Financial Index dived 1.60 percent with The Bank of Nova Scotia (BNS.TO) surrendering 1.36 percent and Toronto-Dominion Bank (TD.TO) slipping 1.13 percent. Royal Bank of Canada (RY.TO) declined 1.57 percent and Manulife Financial Corporation (MFC.TO) down 1.44 percent.

Bank of Montreal (BMO.TO) shed 2.14 percent after F&C Asset Management Plc (FCAM.L) confirmed that it has received an indicative offer from lender BMO Financial Group (BMO.TO) of 120 pence in cash per ordinary share for the entire issued and to be issued ordinary share capital of F&C.

The Capped Industrials Index shed 0.37 percent with Bombardier Inc. (BBD.A.TO, BBD.B.TO) gaining 1.04 percent and Air Canada (AC.B.TO) declining 5.74 percent.

Imperial Metals Corp. (III.TO) said Friday its annual base and precious metals production from Mount Polley, Huckleberry and Sterling mines was 59.1 million pounds copper, 54,456 ounces gold and 243,013 ounces silver. For 2014, Imperial said it expects production from Mount Polley, Huckleberry and Sterling operations of 65 million pounds copper, 56,700 ounces gold and 220,000 ounces silver. The stock eased 0.10 percent.

In economic news, new home sales in the U.S. fell much more than anticipated in December, a Commerce Department report showed Monday, with sales pulling back further off the five-year high set in October. New home sales tumbled 7.0 percent to an annual rate of 414,000 in December from the revised 445,000 in November. Economists expected sales to dip to 455,000 from the 464,000 originally reported for the previous month.

With the steep drop, new home sales pulled back further off the rate of 463,000 seen in October, which was the highest since July of 2008. Despite the drop, new home sales are up 4.5 percent compared to the December 2012 estimate of 396,000.

From the eurozone, German business confidence rose more-than-expected in January, reports citing survey results from the Ifo Institute said. The business confidence index climbed to 110.6 in January from 109.5 a month ago. Economists expected the score at 110. The expectations index improved more than anticipated to 108.9 from 107.4, compared to an estimate of 108.

During this week, investor focus will be on the consumer confidence surveys for January from the Conference Board and the Reuters and the University of Michigan combine, advance fourth quarter GDP estimate, the jobless claims report, the Commerce Department's durable goods orders report and the personal income and spending reports, both for December. The 2-day FOMC meeting beginning Tuesday will also be under the radar.