TSX Ends Higher On Energy Stocks - Canadian Commentary

(RTTNews) - Canadian stocks snapped a two-day loss to end marginally higher Wednesday, led by energy stocks as oil prices perked up on supply concerns with the U.S. and its allies mulling military intervention in Syria. Meanwhile, the uptick slackened after the National Association of Realtors' report showed pending home sales to have dropped more than expected in July.

Yesterday, the main index witnessed a sharp fall after a broad sell-off on fears over possible military action by the U.S. and its allies in Syria, with investor sentiments towards risky equity assets plummeting.

While the U.S. made it clear that it is not contemplating any action aimed at a regime change in Syria, Defense Secretary Chuck Hagel said his forces were ready for any contingency involving the country, and were awaiting a presidential order on any options.

The S&P/TSX Composite Index closed Wednesday at 12,607.22, up 16.01 points or 0.13 percent. The index touched an intraday high of 12,677.47 and a low of 12,582.61. The index shed nearly 200 points or just over 1 percent in the past two sessions.

The Diversified Metals & Mining Index dropped 0.61 percent, with First Quantum Minerals Ltd. (FM.TO) down 2.69 percent, Osisko Mining Corp. (OSK.TO) plummeting 4.41 percent, and Teck Resources Limited (TCK.B.TO) up 0.71 percent. Lundin Mining Corp. (LUN.TO) surrendered 0.87 percent.

The Capped Materials Index surrendered 1.60 percent, with Potash Corporation of Saskatchewan Inc.(POT.TO) dropping 0.73 percent.

Gold futures fluctuated for much of the day to end slightly lower Wednesday, on profit taking after surging a near two percent the day before on its safe haven appeal following news that the U.S. and its allies were in talks for military intervention in the civil war-ravaged Syria.

The Global Gold Index plunged 2.46 percent, with gold futures for December delivery dropping $1.4 or 0.1 percent to close at $1,418.80 an ounce Wednesday on the Nymex.

Among gold stocks, Kinross Gold Corp. (K.TO) shed 2.54 percent, while Yamana Gold Inc. (YRI.TO) dropped 2.15 percent. B2Gold Corp. (BTO.TO) plunged 4.11 percent, while Goldcorp Inc. (G.TO) surrendered 1.31 percent. IAMGOLD Corp. (IMG.TO) dropped 3.87 percent, while Barrick Gold Corp. (ABX.TO) shed 1.84 percent.

Latest data from the Energy Information Administration showed U.S. crude oil inventories to have increased by 3.00 million barrels, while gasoline stocks shed 0.60 million barrels in the week ended August 23. Analysts expected crude oil inventories to decline by 0.30 million barrels last week.

Crude oil prices surged nearly three percent Tuesday, to end at a eighteen-month high on concerns over the geopolitical tensions brewing in Syria with the U.S. and its allies mulling military action, fueling fears of supply disruption from the Middle East region.

The Energy Index gained 1.50 percent, with U.S. crude oil futures for October delivery jumping $1.09 or 1 percent to close at $110.10 a barrel Wednesday on the Nymex.

Among energy stocks, Canadian Natural Resources Limited (CNQ.TO) gained 3.81 percent, Talisman Energy Inc. (TLM.TO) moved up 1.88 percent, and Suncor Energy Inc.(SU.TO) added 1.00 percent.

The Financial Index slipped 0.05 percent with Royal Bank of Canada (RY.TO) up 0.22 percent, Toronto-Dominion Bank (TD.TO) down 0.26 percent, Bank of Montreal (BMO.TO) up 0.21 percent, and Bank of Nova Scotia (BNS.TO) up 0.17 percent. Manulife Financial Corp. (MFC.TO) lost 0.23 percent.

National Bank of Canada (NA.TO) jumped 2.38 percent after reporting a third-quarter profit of C$401 million or C$2.39 per share, up from C$360 million or C$2.14 per share last year. Adjusted earnings were C$373 million or C$2.22 per share for the quarter. Analysts expected a profit of C$2.06 per share for the quarter.

The Information Technology Index gained 1.17 percent, with BlackBerry Limited (BB.TO) climbing 2.94 percent.

The Capped Industrials Index gathered 0.73 percent, with Bombardier Inc. (BBD.A.TO, BBD.B.TO) adding 2.63 percent.

Capital Power Corp. (CPX.TO) and Capital Power L.P. announced that Emera Inc. (EMA.TO) would acquire Capital Power's three New England combined cycle, natural gas-fired power generation facilities for $541 million. Shares of Capital Power Corp. rose 2.72 percent, while Emera down 0.36 percent.

In economic news from the U.S., the National Association of Realtors said its pending home sales index fell 1.3 percent to 109.5 in July from 110.9 in June. Economists had been expecting the index to drop by 1.0 percent. A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

From the eurozone, a forward-looking indicator of German consumer confidence declined unexpectedly in September, reports said citing results of a survey by market research group GfK The consumer confidence indicator for September scored 6.9, down from August's six-year high reading of 7. Economists expected the index to rise to 7.1.

Elsewhere, U.K. retail sales volume grew at the strongest pace since November 2012, the Distributive Trades Survey results from the Confederation of British Industry showed. According to the survey, 49 percent of respondents reported that sales volumes were up on a year ago, while 22 percent said they were down, giving a balance of +27 percent. The August's level exceeded the consensus of 20 percent.

Meanwhile, the Bank of Japan will continue with its quantitative easing program until inflation stabilizes at 2 percent, Deputy Governor Kikuo Iwata said Wednesday. He reiterated that the BoJ will achieve its 2 percent inflation target at the earliest possible time, with a time horizon of about 2 years.