TSX Ends Higher On Global Cues -- Canadian Commentary

(RTTNews) - Canadian stocks snapped a two-day loss to end higher on Monday, tracking rising global equity markets, even as commodity prices rebounded driving energy, mining, financial, and materials shares up significantly.

Most European markets ended higher, overcoming some disappointing economic data from China. However, eurozone investor confidence unexpectedly weakened in August, due mainly to the uncertainty regarding the Chinese stock market outlook.

Markets in the United States also ended in positive territory, with the rally partly due to bargain hunting on the heels of the weakness seen throughout much of last week. The major averages made gains to end firmly in positive territory.

Fed Vice Chair Stanley Fischer said earlier today that the central bank should not hike rates until inflation is back to normal. Consumer prices have been rising at an anemic pace despite interest rates near zero for the past few years.

Meanwhile, China is under increased pressure to step up stimulus for the economy after data over the weekend showed a sharp decline in foreign and domestic demand as well as a slump in producer prices, raising the risks over its aim to achieve the 7 percent growth target.

The benchmark S&P/TSX Composite Index closed Monday at 14,466.39, up 163.69 points or 1.14 percent. The index scaled an intraday high of 14,471.13 and a low of 14,343.09.

On Friday, the index closed down 103.21 points or 0.72 percent, at 14,302.70. The index scaled an intraday high of 14,458.11 and a low of 14,265.03.

Gold futures ended higher after some dovish comments from a top Federal Reserve official that suggests a rate hike may be delayed.

The Gold Index surged 5.54 percent, with gold for August delivery gaining $10.00 or 0.9 percent, to settle at $1,104.10 an ounce on the New York Mercantile Exchange Monday.

Among gold stocks, IAMGOLD Corp. (IMG.TO) climbed 4.39 percent, Yamana Gold Inc. (YRI.TO) soared 5.72 percent, Kinross Gold Corp. (K.TO) added 9.47 percent, Barrick Gold Corp. (ABX.TO) gained 7.14 percent, and Eldorado Gold (ELD.TO) jumped 8.05 percent. Goldcorp Inc. (G.TO) slipped 0.11 percent.

The Capped Materials Index jumped 3.92 percent, with Agnico Eagle Mines Limited (AEM.TO) soaring 6.32 percent and Agrium Inc. (AGU.TO) adding 2.18 percent.

Crude oil futures rebounded to end higher with the dollar trending lower, with the uptick somewhat limited by lingering supply glut concerns.

The Energy Index jumped 2.93 percent, with U.S. crude oil futures for September delivery, the most actively traded contract, surging $1.09 or 2.5 percent, to settle at $44.96 a barrel on the New York Mercantile Exchange Monday.

Cenovus Energy Inc. (CVE.TO) added 3.99 percent, Suncor Energy Inc. (SU.TO) added 0.96 percent, and Encana Corp. (ECA.TO) surged 7.03 percent

Among other energy stocks, Canadian Natural Resources Limited (CNQ.TO) moved up 1.04 percent, Crescent Point Energy Corp. (CPG.TO) jumped 4.41 percent, Canadian Oil Sands (COS.TO) added 2.82 percent, and Enbridge (ENB.TO) moved up 0.39 percent.

The Diversified Metals & Mining Index soared 5.67 percent, as Teck Resources Limited (TCK-B.TO) surged 7.79 percent, Lundin Mining Corp. (LUN.TO) jumped 7.59 percent, and First Quantum Minerals Ltd. (FM.TO) moved up 6.65 percent.

The heavyweight Financial Index jumped 1.22 percent, as National Bank of Canada (NA.TO) added 1.00 percent, Bank of Montreal (BMO.TO) moved up 1.43 percent, and Royal Bank of Canada (RY.TO) gathered 1.24 percent.

Canadian Imperial Bank of Commerce (CM.TO) gained 1.18 percent, Bank of Nova Scotia (BNS.TO) added 0.82 percent, and Toronto-Dominion Bank (TD.TO) gathered 1.58 percent.

The Capped Health Care Index fell 1.06 percent as Valeant Pharmaceuticals International, Inc. (VRX.TO) dipped 0.13 percent and Extendicare Inc. (EXE.TO) gained 0.37 percent.

The Capped Information Technology Index fell 0.17 percent, as BlackBerry Limited (BB.TO) dropped 1.09 percent, Descartes Systems Group (DSG.TO) dipped 0.05 percent, and Constellation Software Inc. (CSU.TO) surrendered 1.05 percent.

The Capped Telecommunication Index surrendered 0.76 percent, as Rogers Communication (RCI-B.TO) fell 1.12 percent, BCE Inc. (BCE.TO) fell 0.24 percent and Manitoba Telecom Services Inc. (MBT.TO) dropped 0.17 percent.

Telecom giant TELUS Corp. (TU, TU.TO) shed 1.46 percent after announcing that Joe Natale is stepping down as President and CEO. Darren Entwistle will resume serving as President and CEO in Vancouver and Dick Auchinleck will serve as independent Chair.

The Capped Industrials Index gained 1.58 percent, as Bombardier (BBD.B.TO) fell 3.29 percent and Finning International Inc. (FTT.TO) moved up 3.79 percent.

Copper Mountain Mining Corp. (CUM.TO) surged 13.51 percent, after reporting second-quarter net income of $2.87 million or C$0.01 per share from C$13.31 million or C$0.08 per share in the year-ago quarter.

Paladin Energy (PDN.TO) surged 12.12 percent on news that CEO John Borshoff is stepping down.

Endo International plc (ENDP, ENL.TO) fell 2.34 percent after reporting adjusted earnings from continuing operations of $1.08 per share, and total adjusted earnings of $1.20 per share for the quarter.

On the economic front, Chinese exports plunged unexpectedly in July, while inflation rose only marginally and stayed well below the government target.

China's exports decreased by 8.3 percent in July, reversing the previous month's 2.8 percent increase. The decline was bigger than the expected 1.5 percent fall. At the same time, imports declined 8.1 percent after a 6.1 percent fall. It was expected to drop 8 percent. Nonetheless, the decline largely reflected easing commodity prices.

Consequently, the trade surplus dropped to $43 billion, well below the expected surplus of $54.7 billion.

Inflation reports from the Chinese Bureau of Statistics showed inflation environment to be conducive for further injection of stimulus. Consumer prices rose 1.6 percent year-over-year in July, faster than the 1.4 percent rate in June and the 1.5 percent rate expected by economists. Meanwhile, producer prices fell at a steeper than expected pace and declined to the lowest level in 6 years. Producer prices contracted further by 5.4 percent annually in July, following a 4.8 percent drop in the previous month.

Eurozone investor confidence unexpectedly weakened in August, due mainly to the uncertainty regarding the Chinese stock market outlook and the dampened expectations for the economy in Asia excluding Japan, survey results from Sentix showed Monday. The investor confidence index dropped to 18.4 from 18.5 in July, the think tank said. Economists had expected a higher score of 20.

Japan's consumer sentiment decreased in July, after rising slightly in the prior month, survey figures from Cabinet Office showed Monday. The consumer confidence index fell to 40.3 in July from 41.7 in June. In May, the score was 41.4.

Greece and its creditors may be able to conclude their talks over a EUR 86 billion bailout deal for the country as early as Tuesday, reports said Monday. The process has been hastened to enable the deal go to national parliaments in the euro area for approval. The Greek parliament is expected to pass any possible deal by the middle of the week, reports said citing sources.

The Organization for Economic Co-operation and Development said Monday the composite leading index signals stable growth momentum in the region. The leading index remained unchanged at 100 in June. While the leading index signaled firming growth in the euro area, it pointed to growth easing to long-term trends in the United States and the United Kingdom.

Stable growth momentum is expected in Germany, Japan and India. In Brazil and China, the index suggested more strong than last month to a loss in growth momentum.