TSX Ends Higher On Global Cues, Equity Markets -- Canadian Commentary

(RTTNews) - Canadian stocks surged to end sharply higher Tuesday, tracking rising global equity markets, led by the strong performance of the Chinese stock market. The majority of the Canadian sectors are positive this morning, but energy and gold stocks are lagging behind.

The markets were up after returning to action following the Labor Day holiday.

China's Shanghai Composite Index jumped 2.9 percent, after a slew of support measures were unleashed by Beijing. The measures included tax exemption on dividends and a move to introduce a market-wide circuit breaker system to stabilize the market also helped investors shrug off weak data underlying weakness in the world's second-largest economy.

Markets in Europe ended firmly in he green, after German exports expanded by more-than-expected in July. The eurozone economy also grew more than initially estimated in the second quarter.

Markets in the United States also climbed to end in firm positive territory. The strength in China has provided a boost after the long holiday weekend. However, traders were reluctant to make any significant moves amid a lack of major U.S. economic data.

The benchmark S&P/TSX Composite Index closed Tuesday at 13,630.67, up 152.36 points or 1.13 percent. The index scaled an intraday high of 13,509.95 and a low of 13,414.58.

On Friday, the index closed down 118.10 points or 0.87 percent, at 13,478.31. The index scaled an intraday high of 13,683.57 and a low of 13,593.48.

The Diversified Metals & Mining Index surged 8.76 percent, as First Quantum Minerals (FM.TO) soared 22.90 percent, Teck Resources Limited (TCK-B.TO) jumped 5.98 percent, and HudBay Minerals Inc. (HBM.TO) jumped 8.87 percent.

The heavyweight Financial Index added 1.42 percent, as Bank of Montreal (BMO.TO) added 1.18 percent, National Bank of Canada (NA.TO) gained 0.52 percent, and Royal Bank of Canada (RY.TO) jumped 2.16 percent.

Toronto-Dominion Bank (TD.TO) gathered 1.76 percent, Bank of Nova Scotia (BNS.TO) moved up 1.74 percent, and Canadian Imperial Bank of Commerce (CM.TO) added 0.91 percent.

Crude oil ended lower for a second straight session on Tuesday, as investors turned to the more riskier equity assets as most major global stock markets continued to strengthen.

The Energy Index added 0.45 percent, with U.S. crude oil futures for October delivery, the most actively traded contract, slipping $0.11 or 0.2 percent, to settle at $45.94 a barrel on the New York Mercantile Exchange Tuesday.

Among energy stocks, Crescent Point Energy Corp. (CPG.TO) fell 0.48 percent, Canadian Natural Resources Limited (CNQ.TO) shed 3.14 percent, Cenovus Energy (CVE.TO) fell 0.61 percent, and Encana Corp. (ECA.TO) moved up 0.88 percent.

Suncor Energy Inc. (SU.TO) inched up 0.40 percent, while Canadian Oil Sands (COS.TO) climbed 4.15 percent.

Gold futures ended a shade lower ahead of the two-day Federal Open Market Committee meet next week, even as the dollar trended lower against some major currencies.

The Gold Index inched up 0.07 percent, with gold for December delivery dropping $0.40, to settle at $1,121.00 an ounce on the New York Mercantile Exchange Friday.

Yamana Gold Inc. (YRI.TO) dropped 3.10 percent, while IAMGOLD Corp. (IMG.TO) shed 1.93 percent. Barrick Gold (ABX.TO) gained 1.18 percent, and Eldorado Gold (ELD.TO) rose 1.66 percent.

The Capped Materials Index dropped 0.65 percent, as Agnico Eagle Mines Limited (AEM.TO) fell 0.93 percent, Agrium Inc. (AGU.TO) gained 2.38 percent, and Potash Corp. of Saskatchewan Inc. (POT.TO) inched up 0.03 percent.

The Capped Health Care Index dropped 2.47 percent, as Valeant Pharmaceuticals International (VRX.TO) gained 0.71 percent and Extendicare Inc. (EXE.TO) fell 0.49 percent.

Concordia Healthcare (CXR.TO) tumbled 10.65 percent, after it agreed to acquire U.K.-based drug-maker Amdipharm Mercury Ltd. from European private equity firm Cinven and other investors for about $3.5 billion.

The Capped Information Technology Index gained 1.28 percent, as BlackBerry Limited (BB.TO) added 0.93 percent and Descartes Systems Group (DSG.TO) climbed 0.91 percent.

The Capped Telecommunication Index moved up 0.40 percent, as Rogers Communication (RCI-B.TO) climbed 1.53 percent, BCE Inc. (BCE.TO) gathered 1.72 percent, and TELUS Corp. (T.TO) shed 1.00 percent.

The Capped Industrials Index jumped 2.10 percent, as Finning International Inc. (FTT.TO) gained 2.70 percent and Air Canada added 0.61 percent.

Bombardier (BBD-B.TO) gained 0.85 percent. Nico Buchholz has been appointed as its Senior Vice President and Chief Procurement Officer.

Husky Energy (HSE.TO) gained 0.77 percent. The company has started production from a second oil well at its South White Rose Extension Drill Centre.

AuRico Metals (AMI.TO) climbed 3.03 percent, after it agreed to acquire Mineral Streams Inc.

On the economic front, Chinese exports declined for the second straight month in August even after the devaluation of its currency and successive interest rate reductions. Imports also logged a double-digit decline, signaling some weak domestic demand.

China's exports fell 5.5 percent year-on-year in August following the prior month's 8.3 percent decrease. Economists had forecast a 6.6 percent drop. Imports slid 13.8 percent after easing 8.1 percent in July. Imports were expected to fall at a slower pace of 7.9 percent.

Consequently, China's trade balance showed a surplus of $60.24 billion in August, well above the expected level of $48 billion.

Eurozone economy grew more than initially estimated in the second quarter as strong exports offset a decline in investment. Gross domestic product advanced 0.4 percent sequentially after rising 0.5 percent a quarter ago, Eurostat reported Tuesday. The first quarter growth was the fastest since the same quarter of 2011, when the economy expanded 0.9 percent.

German exports expanded more-than-expected to a record high in July, led by a weak euro, suggesting that it would again be the major growth engine in the third quarter.

German exports rose 2.4 percent month-on-month in July, which was the fastest growth since December 2014. Economists had forecast shipments to grow 1 percent reversing a 1.1 percent fall in June. Imports advanced by a faster-than-expected 2.2 percent in July after declining 0.8 percent in June. Imports were expected to grow 0.7 percent.

France's trade deficit in July widened more-than-expected from the previous month as both exports and imports moderated, figures from the French Customs showed Tuesday. The trade deficit increased to EUR 3.299 billion from EUR 2.757 billion in June, which was the smallest since July 2009. Economists had forecast a shortfall of EUR 3.100 billion. A year ago, the deficit was EUR 5.557 billion.

The Organization for Economic Cooperation and Development on Tuesday said it expects growth to slow in China, the U.S. and the U.K. Most developing economies are also indicated to slowdown including South Africa, Russia and Brazil in the second quarter. But the OECD's leading indicators show India will be an exception, with higher growth.