TSX Ends A Shade Lower On Oil Prices, IMF Forecast -- Canadian Commentary

(RTTNews) - Canadian stocks ended a tad lower on Tuesday, after the International Monetary Fund slashed its global economic growth for 2015 and weighed down by energy stocks with oil prices slipping below $47 a barrel. Nonetheless, the losses were largely offset by rising gold and mining with gold prices continuing to climb.

The International Monetary Fund downgraded its global growth outlook as positive effects of lower oil prices and the depreciation of the euro and yen have more than offset weakness in investment in many advanced and emerging market economies.

In its World Economic Outlook Update Tuesday, the Washington-based lender said the global economy is set to grow 3.5 percent this year, down from the 3.8 percent expansion projected in October. The growth in 2016 is projected to be 3.7 percent instead of 4 percent predicted previously.

Even with sharply lower oil prices, the economic outlook is still subdued weighed down by underlying weakness elsewhere, the IMF said.

Meanwhile, official data showed the Chinese economy in 2014 to have registered its weakest growth since 1990. For the fourth quarter, the Chinese economy grew at its slowest pace since early 2009 albeit better than the consensus estimate, data from the National Bureau of Statistics reported Tuesday.

With the ECB expected to print money on Thursday amid uncertainty over the future of Greece in the eurozone, gold's safe haven premium has driven bullion prices sharply higher in 2015.

The benchmark S&P/TSX Composite Index closed Tuesday at 14,308.44, down 4.06 points or 0.03 percent. The index scaled an intraday high of 14,377.63 and a low of 14,260.43.

On Monday, the index closed up 3.09 points or 0.02 percent, at 14,312.50. The index scaled an intraday high of 14,323.82 and a low of 14,195.39.

Crude oil plummeted on demand growth concerns, after the International Monetary Fund slashed its 2015 global economic growth forecast and with China's economy growing at its slowest in about 25 years.

The Energy Index shed 2.40 percent, with U.S. crude oil futures for March delivery, plunging $2.66 or 5.7 percent, to settle at $46.47 a barrel on the Nymex Tuesday.

Among energy stocks, Pacific Rubiales Energy Corp. (PRE.TO) plunged 13.70 percent, Legacy Oil + Gas Inc. (LEG.TO) dropped 6.79 percent, Canadian Natural Resources Limited (CNQ.TO) slipped 0.67 percent, Suncor Energy Inc. (SU.TO) fell 1.74 percent, and Canadian Oil Sands Limited (COS.TO) dived 6.91 percent.

Encana Corp. (ECA.TO) gained 0.24 percent, Crescent Point Energy (CPG.TO) fell 4.19 percent and Cenovus Energy Inc. (CVE.TO) shed 2.06 percent.

The Diversified Metals & Mining Index gained 2.16 percent, as First Quantum Minerals Ltd. (FM.TO) added 2.46 percent, and Lundin Mining Corp. (LUN.TO) shed 1.83 percent.

Teck Resources Limited (TCK.B.TO) gained 1.60 percent, Finning International Inc. (FTT.TO) dropped 2.00 percent, and HudBay Minerals (HBM.TO) added 3.77 percent.

Gold futures ended higher for a seventh straight session on Tuesday amid mounting speculation that the European Central Bank will embark on a full-scale quantitative easing at its meeting later this week.

The Global Gold Index jumped 4.19 percent, with gold for February delivery surging $17.30 or 1.4 percent to settle at $1,294.20 on the New York Mercantile Exchange Tuesday.

Among gold stocks, Yamana Gold Inc. (YRI.TO) added 2.63 percent, Agnico Eagle Mines Limited (AEM.TO) gained 3.42 percent, and Goldcorp Inc. (G.TO) moved up 2.48 percent.

Kinross Gold Corp. (K.TO) added 1.86 percent, Eldorado Gold Corp. (ELD.TO) climbed 3.97 percent, Barrick Gold Corp .(ABX.TO) jumped 6.83 percent, and Franco-Nevada Corp. (FNV.TO) gathered 4.88 percent. B2Gold Corp. (BTO.TO) jumped 7.78 percent.

The Capped Materials Index gained 2.93 percent, mostly on rising gold stocks, with Potash Corp. of Saskatchewan Inc. (POT.TO) adding 3.48 percent.

The heavyweight Financial Index slipped 0.33 percent, as National Bank of Canada (NA.TO) slipped 0.09 percent, Toronto-Dominion Bank (TD.TO) dropped 0.22 percent, and Bank of Nova Scotia (BNS.TO) edged down 0.02 percent.

Royal Bank of Canada (RY.TO) fell 0.59 percent, while Bank of Montreal (BMO.TO) advanced 0.19 percent. Canadian Imperial Bank of Commerce (CM.TO) added 0.07 percent.

The Capped Industrials Index added 0.48 percent, as Bombardier Inc. (BBD.B.TO) gained 3.32 percent with Air Canada (AC.TO) up 1.39 percent.

The Information Technology Index shed 0.35 percent, with BlackBerry Limited (BB.TO) down 0.41 percent, Sierra Wireless (SW.TO) down 1.79 percent and Constellation Software (CSU.TO) gained 0.26 percent.

The Healthcare Index dropped 0.46 percent, as Valeant Pharmaceuticals International, Inc. (VRX.TO) added 0.56 percent and Catamaran Corp. (CCT.TO) down 0.37 percent.

On the economic front, Statistics Canada said Tuesday that Canadian manufacturing sales dropped by 1.4 percent in November, following the 1.1 percent decrease in October. Economists expected a decrease of 0.7 percent. The larger than expected drop in November was due to lower sales of motor vehicles, which sank 5.9 percent.

In other economic news, homebuilder confidence in the U.S. deteriorated modestly in January, a report from the National Association of Home Builders showed Tuesday. The NAHB/Wells Fargo Housing Market Index edged down to 57 in January from an upwardly revised 58 in December. Economists expected the index at 58 from the 57 originally reported for the previous month.

From Asia, the Chinese economy grew at the weakest pace since early 2009, with its Gross domestic product, or GDP, rising 7.3 percent in the fourth quarter from a year ago, the same rate as in the third quarter. This was the weakest growth since the first quarter of 2009. However, the growth was stronger than the 7.2 percent rise forecast by economists.

For the year 2014, China's GDP was up 7.4 percent, the weakest growth since 1990. The growth rate was broadly in line with the government's target of about 7.5 percent and more than the 7.3 percent consensus estimate.

China's housing sales declined in 2014, but signaled positive signs in the last few months as market sentiment was boosted by an interest rate cut by the central bank in November. New home sales dropped 7.8 percent in the whole year 2014 to 6.24 trillion yuan, reports said Tuesday citing data from the National Bureau of Statistics. In the first eleven months, home sales slid 9.7 percent from the same period a year ago. In December, home sales climbed 4.2 percent from a year earlier to 938.4 billion yuan.

Chinese retail sales rose 11.9 percent year-over-year in December following the 11.7 percent rise in November, data from the National Bureau of Statistics showed Tuesday. Economists expected sales to increase at the stable rate of 11.7 percent.

China's industrial production rose 7.9 percent year-over-year in December following the 7.2 percent growth in November. Economists expected production to rise 7.4 percent.

Falling oil prices and weak euro boosted German economic confidence to an 11-month high in January, a survey by the ZEW Centre for European Economic Research showed Tuesday. The indicator of economic sentiment rose sharply to 48.4 in January from 34.9 in December, the Mannheim-based institute said. The reading was forecast to rise to 40. This was the third consecutive rise in the index and marked the highest score since February 2014, when the reading was at 55.7.

Elsewhere in Europe, the average asking price for a house in the United Kingdom was up 1.4 percent on month in January, property tracking website Rightmove said on Monday. This follows the upwardly revised 2.2 percent contraction in December (originally -3.3 percent).