Canadian Stocks Are Falling As Banks Weaken -- Canadian Commentary

(RTTNews) - The Canadian stock market has been declining since the open of trade Wednesday. The heavyweight financial sector is under pressure this morning, following yesterday's strong gains. Barclays upgraded Canada's big five banks yesterday, noting fears about Home Capital (HCG.TO) contagion are overblown.

The Bank of Canada has maintained its overnight rate target at 0.5 percent Wednesday morning. The decision was in line with the expectations of economists.

Markets in Europe are little changed overall Wednesday. The markets have been fluctuating between small gains and losses over the course of the day, but have remained relatively flat. Energy stocks are among the best performers across the pond today, while miners are under pressure after Moody's Investors Services downgraded China's long-term local and foreign currency issuer ratings.

Markets in the United States are also flat in early trade Wednesday. Traders are in a cautious mood as they look ahead to the release of the minutes of the latest Federal Reserve meeting this afternoon. The minutes of the meeting held earlier this month may shed some additional light on the outlook for interest rates ahead of the next meeting in mid-June.

The benchmark S&P/TSX Composite Index is down 46.62 points or 0.30 percent at 15,430.32.

On Tuesday, the index closed up 18.48 points or 0.12 percent, at 15,476.94. The index scaled an intraday high of 15,538.78 and a low of 15,465.90.

The heavyweight Financial Index is decreasing 0.83 percent. Bank of Nova Scotia (BNS.TO) is losing 0.55 percent and Royal Bank of Canada (RY.TO) is falling 0.89 percent. National Bank of Canada (NA.TO) is down 1.32 percent and Toronto-Dominion Bank (TD.TO) is weakening by 1.13 percent. Canadian Imperial Bank of Commerce (CM.TO) is also lower by 1.12 percent.

Bank of Montreal (BMO.TO) is declining 2.53 percent. The bank released earnings for its second quarter that advanced 12% from last year. The company said its bottom line advanced to C$1.29 billion, or C$1.92 per share. This was up from C$1.15 billion, or C$1.73 per share, in last year's second quarter. BMO also boosted its dividend.

The Capped Healthcare Index is lower by 0.55 percent. Valeant Pharmaceuticals International (VRX.TO) is weakening by 1.61 percent.

The Capped Information Technology Index is losing 0.27 percent. BlackBerry (BB.TO) is down 0.72 percent and Descartes Systems Group (DSG.TO) is lower by 0.20 percent. Sierra Wireless (SW.TO) is falling 0.55 percent and Constellation Software (CSU.TO) is weakening by 0.45 percent.

The Energy Index is falling 0.21 percent. Crude oil futures are little changed Wednesday morning, clinging to recent gains ahead of the most crucial OPEC meeting of the year.

Encana (ECA.TO) is decreasing 1.85 percent and Crescent Point Energy (CPG.TO) is declining 0.19 percent. Cenovus Energy (CVE.TO) is lower by 0.69 percent and Husky Energy (HSE.TO) is slipping 0.06 percent. Imperial Oil (IMO.TO) is dropping 1.45 percent.

Canadian Natural Resources (CNQ.TO) is gaining 0.12 percent. Royal Dutch Shell has decided to sell a nearly $4.1-billion stake in Canadian Natural Resources, Reuters reports.

The Gold Index is declining 0.16 percent. Gold prices are trading slightly lower Wednesday morning, ahead of the release of the minutes from the most recent Federal Reserve meeting later today.

Eldorado Gold (ELD.TO) is declining 0.22 percent and Yamana Gold (YRI.TO) is slipping 0.14 percent. B2Gold (BTO.TO) is falling 0.46 percent and Kinross Gold (K.TO) is losing 0.62 percent.

The Capped Materials Index is also down 0.20 percent.

Agnico Eagle Mines (AEM.TO) is falling 0.51 percent and Agrium (AGU.TO) is weakening by 0.51 percent. Potash Corp. of Saskatchewan (POT.TO) is also decreasing 0.58 percent.

On the economic front, a measure of future economic activity in Eurozone increased further in April, survey figures from the Conference Board showed Tuesday.

The Conference Board's Leading Economic Index, or LEI, for the euro area climbed 0.7 percent monthly in April, following a 0.6 percent rise each in February and March.

Germany's consumer confidence is set to continue its rising trend in June on the back of further improvement in expectations on income and economy, results of a survey by the GfK market research group showed Wednesday, defying expectations for stability.

The forward-looking Consumer Confidence Index rose to 10.4 points from 10.2 points in May, the Nuremberg-based GfK said. Economists had expected the measure to remain unchanged.

Existing home sales in the U.S. pulled back by more than anticipated in the month of April, according to a report released by the National Association of Realtors on Wednesday.

NAR said existing home sales fell by 2.3 percent to an annual rate of 5.57 million in April after jumping by 4.2 percent to a ten-year high of 5.70 million in March. Economists had expected sales to drop to a rate of 5.65 million.

In commodities, crude oil futures for June delivery are up 0.09 or 0.17 percent at $51.56 a barrel.

Natural gas for June is down 0.032 or 0.99 percent at $3.187 per million btu.

Gold futures for June are down $2.10 or 0.17 percent at $1,253.40 an ounce.

Silver for July is down $0.039 or 0.23 percent at $17.10 an ounce.