TSX Ends Higher After China Rate Cut -- Canadian Commentary

(RTTNews) - Canadian stocks moved up for a sixth straight session to end at a near two-month high on Friday, driven by a surge in resource stocks as commodity prices spiked after a surprise Chinese interest rate cut and hopes of further stimulus from the European Central Bank.

The People's Bank of China in an effort to spur economic growth slashed its key lending rate to 5.6 percent and lowered deposit rate to 2.75 percent. The surprise rate cut, which was the first reduction since July 2012, comes as the world's second largest economy is forecast to log its weakest growth in nearly 25 years.

Global equity markets also perked up after Draghi, speaking at the Frankfurt European Banking Congress, said the central bank will expand its asset purchase program if inflation fails to show signs of returning to the targeted level.

Investors also digested data showing an unexpected rise in Canadian consumer prices. According to Statistics Canada, consumer price inflation rose to 2.4 percent in October, following a 2.0 percent increase in the preceding month. Economists expected inflation to come in at 2.0 percent. Core CPI was up 2.3 percent last month, compared to 2.1 percent in September.

Oil and gold stocks are moving up, tracking higher crude oil and bullion prices.

The benchmark S&P/TSX Composite Index closed Friday at 15,111.08, up 35.90 points or 0.24 percent. The index scaled a intraday high of 15,184.36 and a low of 15,087.42.

On Thursday, the index ended up 95.03 points or 0.63 percent at 15,075.18, after some largely upbeat data from the U.S. with the Federal Reserve minutes indicating some concerns about deflation in the world's largest economy.

Crude oil ended higher on China's move to prop up its sagging economy with an unexpected interest rate cut, notwithstanding a strong dollar.

The Energy Index jumped 1.82 percent, with U.S. crude oil futures for January delivery gaining $0.66 or 0.9 percent to close at $76.51 a barrel on the Nymex Friday.

Pipeline operator TransCanada Corp. (TRP.TO) dropped 1.08 percent after announcing plans to spend $46 billion through 2020 to connect shale and oil sands in Western Canada with markets.

Among energy stocks, Suncor Energy Inc. (SU.TO) gained 2.09 percent, Talisman Energy Inc. (TLM.TO) gained 3.53 percent, Canadian Oil Sands Limited (COS.TO) added 1.03 percent, Cenovus Energy Inc. (CVE.TO) advanced 1.78 percent, and Pacific Rubiales Energy Corp. (PRE.TO) surged 6.68 percent.

Encana Corp. (ECA:TSX) gained 1.46 percent, Canadian Natural Resources Limited (CNQ.TO) added 1.28 percent, and Enbridge, Inc. (ENB.TO) dropped 0.51 percent.

Gold futures ended higher on China's move to cut its key interest rates for the first time in more than two years in a bid to boost a sagging economy.

Nevertheless, the Global Gold Index slipped 0.11 percent, although gold for December delivery gained $6.80 or 0.6 percent to settle at $1,197.70 an ounce on the New York Mercantile Exchange Friday.

In the gold space, Kinross Gold Corp. (K.TO) fell 0.62 percent, Goldcorp Inc. (G.TO) dropped 1.20 percent, Barrick Gold Corp. (ABX.TO) lost 0.62 percent, and Yamana Gold Inc. (YRI.TO) gave up 0.22 percent.

Detour Gold Corp. (DGC.TO) added 1.34 percent, IAMGOLD Corp. (IMG.TO) fell 0.77 percent, and Eldorado Gold Corp. (ELD.TO) surrendered 1.80 percent.

The Capped Materials Index gained 0.79 percent, mostly on rising gold stocks, with Potash Corp. of Saskatchewan Inc. (POT.TO) dropping 0.12 percent.

The Healthcare Index inched up 0.04 percent, as Catamaran Corp. (CCT.TO) fell 0.59 percent and Extendicare Inc. (EXE.TO) dropped 0.72 percent.

Valeant Pharmaceuticals International, Inc. (VRX.TO) gained 1.18 percent after cutting its stake in Allergan Inc to 0.1 percent from 9.7 percent.

The heavyweight Financial Index dropped 0.24 percent, as Bank of Nova Scotia (BNS.TO) gained 0.19 percent, Toronto-Dominion Bank (TD.TO) shed 0.49 percent, Canadian Imperial Bank of Commerce (CM.TO) inched up 0.02 percent, Bank of Montreal (BMO.TO) fell 0.07 percent, and National Bank of Canada (NA.TO) shed 0.48 percent.

Royal Bank of Canada (RY.TO) dropped 0.52 percent, after announcing the shutdown of its international client-wealth-management business in the Caribbean and is likely to cut 300 jobs.

The Diversified Metals & Mining Index soared 5.70 percent, with First Quantum Minerals Ltd. (FM.TO) surging 7.05percent, Teck Resources Limited (TCK.B.TO) soaring 9.44 percent, and Lundin Mining Corp. (LUN.TO) jumping 5.44 percent. Sherritt International Corp. (S.TO) gained 3.73 percent.

The Capped Industrials Index gathered 0.30 percent, with Bombardier Inc. (BBD.B.TO) down 0.23 percent and Air Canada (AC) down 0.39 percent. SNC-Lavalin Group Inc. (SNC.TO) gained 0.18 percent, while MacDonald, Dettwiler and Associates Ltd. (MDA.TO) added 0.25 percent.

The Information Technology Index moved up 0.02 percent with smartphone maker BlackBerry Limited (BB.TO) up 1.23 percent. Among other tech stocks, CGI Group Inc. (GIB.A.TO) added 0.49 percent, Open Text Corporation (OTC.TO) dropped 1.16 percent, and Constellation Software Inc. (CSU.TO) fell 1.24 percent.

The Telecom Index dipped 0.11 percent with TELUS Corp. (T.TO) down 0.66 percent, and BCE Inc. (BCE.TO) up 0.21 percent.

The Consumer Discretionary Index fell 0.18 percent, with Tim Hortons Inc. (THI.TO) up 0.49 percent.

The Consumer Staples Index shed 0.41 percent, with Metro Inc. (MRU.TO) down 0.37 percent, Saputo Inc. (SAP.TO) down 0.84 percent, and George Weston Limited (WN.TO) up 0.38 percent.

In economic news, the People's Bank of China in a significant move cut its key one-year lending rate by 40 basis points to 5.6 percent and the one-year deposit rate was lowered by 25 basis points to 2.75 percent.

Meanwhile, hopes of additional stimulus from the European Central Bank have increased after the bank's President Mario Draghi said the ECB will expand its asset purchase program if inflation fails to show signs of returning to the targeted level.

Eurozone's consumer confidence declined in November, defying expectations for an increase, preliminary data from the European Commission showed Friday. The flash consumer confidence indicator decreased to -11.6 from a -11.1 in October. Economists had forecast the index to rise to -10.7. For the EU, the consumer confidence index slid by 0.8 points to -8.2.

The leading index for Germany remained flat in September, data from the Conference Board showed Friday. The leading index was unchanged month-over-month in September after the 1.3 percent decline in August. The coincident index, a measure of current economic conditions, also remained flat in September following the 0.3 percent drop in the previous month.