TSX Ends Lower On Global Cues - Canadian Commentary

(RTTNews) - Canadian stocks settled sharply lower on Tuesday, tracking declining U.S. and European markets, led by resource stocks on uncertainty surrounding the partial shutdown and debt ceiling woes south of the border. Investors continued to monitor the U.S. budget deadlock closely, with concerns growing over the looming debt ceiling deadline, with added fears the shutdown could continue for an extended period of time.

The partial shutdown of the U.S. government entered the eighth day, edging closer to October 17 deadline for increasing the nation's debt ceiling. The Congressional Budget Office projects that the Treasury will exhaust all borrowing authority, as well as its cash balance, between October 22 and October 31.

Meanwhile, the International Monetary Fund trimmed its global growth forecast for this year and as well as the next year.

The S&P/TSX Composite Index closed Tuesday at 12,692.41, down 95.84 points or 0.75 percent. The index touched an intraday high of 12,824.22 and a low of 12,682.94.

The Diversified Metals & Mining Index dived 2.26 percent, with Teck Resources Limited (TCK.B.TO) down 2.82 percent and Lundin Mining Corp. (LUN.TO) slipping 1.58 percent. Osisko Mining Corp. (OSK.TO) shed 1.50 percent.

The Capped Materials Index shed 2.39 percent, with Potash Corporation of Saskatchewan Inc.(POT.TO) down 0.83 percent

The Global Gold Index dipped 2.64 percent, with gold futures for December delivery edging down $0.50 to close at $1,324.60 an ounce Tuesday on the Nymex.

Yamana Gold Inc. (YRI.TO) dropped 3.12 percent, while Barrick Gold Corp. (ABX.TO) shed 2.77 percent. Goldcorp Inc. (G.TO) dropped 2.23 percent, while Kinross Gold Corp. (K.TO) surrendered 2.37 percent, Eldorado Gold Corp. (ELD.TO) plunged 5.40 percent.

The Energy Index dropped 1.04 percent, with U.S. crude oil futures for November delivery gaining $0.46 or 0.5 percent to close at $103.49 a barrel Tuesday on the Nymex.

Among energy stocks, Suncor Energy Inc.(SU.TO) shed 2.10 percent, while. Enbridge Inc. (ENB.TO) added 0.17 percent. Imperial Oil Limited (IMO.TO) shed 1.22 percent, while Encana Corp. (ECA) edged up 0.23 percent.

Activist investor Carl Icahn has acquired a 5.97 percent stake in Canadian oil and gas producer Talisman Energy Inc. (TLM.TO) and plans to hold talks with the company's management to discuss strategic alternatives as well as board seats. Shares of Talisman gained 1.98 percent

The Financial Index shed 0.33 percent with Bank of Montreal (BMO.TO) slipping 0.26 percent and Manulife Financial Corp. (MFC.TO) down 0.58 percent. The Bank of Nova Scotia (BNS.TO) dropped 0.24 percent, while Toronto-Dominion Bank (TD.TO) slipped 0.43 percent. Royal Bank of Canada (RY.TO) dropped 0.24 percent, while National Bank of Canada (NA.TO) surrendered 0.40 percent.

The Information Technology Index lost 0.28 percent, with smartphone maker BlackBerry Limited (BB.TO) edging up 0.37 percent.

The Capped Industrials Index edged down 0.06 percent, with Bombardier Inc. (BBD.A.TO, BBD.B.TO) gaining 1.06 percent and Air Canada (AC.B.TO) shedding 1.29 percent.

Diary products company Saputo Inc. (SAP.TO) gained 4.08 percent after announcing that it would acquire Warrnambool Cheese and Butter Factory Co. Holdings Ltd in an all cash offer of AU$7.00 per share. The enterprise value of Warrnambool implied by the Offer is approximately CA$450 million, based on CA$73 million of net debt as of June 2013.

In economic news, Statistics Canada said the nation's trade deficit with rest of the world widened to $1.3 billion in August from $1.2 billion in July as merchandise imports grew 2.1 percent in August, while exports were up only 1.8 percent.

Separately, the Canada Mortgage and Housing Corp. said the seasonally adjusted annualized rate of housing starts was 193,600 units last month, up from an upwardly revised 184,000 in August and came in above consensus expectations for 185,000. Housing starts in August were initially reported as 180,300.

In economic news from the eurozone, Germany's overall exports recovered in August from July, while the growth in imports increased marginally, data from the Federal Statistical Office showed. Exports advanced 1 percent month-on-month, offsetting July's 0.8 percent fall. Meanwhile, imports rose 0.4 percent, slightly faster than the 0.3 percent increase seen in July.

Meanwhile, German factory orders declined unexpectedly in August due to a fall in foreign demand, official data showed. Data from the Federal Ministry of Economics and Technology revealed a 0.3 percent month-on-month drop in factory orders. It was forecast to expand by 1.1 percent in August. Nonetheless, the rate of decline slowed from the 1.9 percent drop seen in July.

The International Monetary Fund on Tuesday trimmed its global growth forecast for this year and the next, citing policy challenges in the U.S. and slowing growth in emerging markets.

In its latest World Economic Report, the lender cut its growth forecast for this year to 2.9 percent from 3.1 percent projected earlier in July. The outlook for 2014 was lowered to 3.6 percent from 3.8 percent forecast earlier. The IMF trimmed its growth forecast for the sixth time in a row, indicating the improvement next year is likely to be driven mostly by advanced economies.