TSX Ends Lower On Iraq Concerns -- Canadian Commentary

(RTTNews) - Canadian stocks edged down to end a tad lower on Monday, with investors keenly focused on the deteriorating situation in Iraq, notwithstanding some upbeat economic data from the U.S. and China.

While a positive reading on Chinese manufacturing activity in June and better than expected reports on U.S. manufacturing activity and home sales are aided sentiment, a weak reading on eurozone private sector growth appears to have hurt a bit.

The mood was generally cautious with investors watching the developments in Iraq, with reports indicating Sunni militants marching toward Baghdad, seizing more cities in Northern Iraq on the way.

Meanwhile, U.S. Secretary of State John Kerry is in Baghdad to broker a deal between the government and political opponents.

Kerry has had discussions with Iraqi Prime Minister Nouri al-Maliki as well as top Shia and Kurdish leaders to find ways to stop the onslaught from the ISIS al Qaeda-linked militants. He is reported have stressed the need to form a unity government quickly involving all concerned, including Shias, Sunnis, and Kurds. It is also reported that al-Maliki has promised to initiate proceedings towards forming a unity government involving diverse communities beginning July.

While energy and industrial stocks struggled a bit, gold stocks ended strongly as did technology shares.

The S&P/TSX Composite Index closed Friday at 15,105.63, down 3.34 points or 0.02 percent. The index scaled an intraday high of 15,117.95 and a low of 15,073.82.

The index is still below its all-time high of 15,154.77 recorded on June 6, 2008.

Crude oil ended lower with Secretary of State John Kerry in Baghdad for talks with political and religious leaders to tackle the ISIS threat. Nonetheless, the losses were limited after some upbeat economic data from the U.S. and China.

The Energy Index dipped 0.04 percent, with U.S. crude oil futures for July delivery, the most actively traded contract, shedding $0.66 or 0.6 percent to close at $106.17 a barrel Monday on the Nymex.

Among energy stocks, Canadian Natural Resources Ltd. (CNQ.TO) added 0.78 percent, Talisman Energy Inc. (TLM.TO) added 11.57 percent, Suncor Energy Inc.(SU.TO) gained 0.33 percent, Cenovus Energy Inc. (CVE.TO) up 1.00 percent, and Encana Corp. (ECA.TO) surrendered 0.08 percent.

The Financial Index dipped 0.02 percent with Royal Bank of Canada (RY.TO) down 0.15 percent, Toronto-Dominion Bank down 0.35 percent, Bank of Montreal (BMO.TO) slipped 0.13 percent, and Bank of Nova Scotia (BNS.TO) added 0.41 percent.

The Capped Healthcare Index shed 0.59 percent with Valeant Pharmaceuticals International, Inc. (VRX.TO) down 1.40 percent.

Gold futures ended higher for a fourth straight session with investors keeping a close watch on the developments in Iraq with Secretary of State John Kerry in Baghdad.

The Global Gold Index added 1.50 percent, with gold futures for August delivery adding $1.80 or 0.1 percent to close at $1,318.40 an ounce Monday on the Nymex.

Among other gold stocks, B2Gold Corp. (BTO.TO) up 1.95 percent, Yamana Gold Inc. (YRI.TO) up 1.2 percent, Goldcorp Inc. (G.TO) down 2.57 percent and Barrick Gold Corp. (ABX.TO) up 1.94 percent.

The Capped Materials Index gained 1.06 percent, with Potash Corp. of Saskatchewan Inc. (POT.TO) down 0.49 percent.

The Diversified Metals & Mining Index added 0.81 percent, with Lundin Mining Corp. (LUN.TO) up 1.25 percent, First Quantum Minerals Ltd. (FM.TO) up 3.22 percent, and Teck Resources Limited (TCK.B.TO) added 1.33 percent.

The Information Technology Index advanced 0.60 percent, with BlackBerry Limited (BB.TO) up 3.24 percent.

Among other tech stocks, CGI Group Inc. (GIB.A.TO) slipped 0.16 percent, Constellation Software Inc. (CSU.TO) dropped 0.62 percent, and Avigilon Corp. (AVO.TO) added 0.30 percent.

The Capped Industrials Index dropped 0.37 percent, with Bombardier Inc. (BBD.B.TO) up 0.52 percent, Canadian National Railway Company (CNR.TO) down 0.86 percent, and Canadian Pacific Railway Limited (CP.TO) down 0.62 percent. Among airliners, WestJet Airlines (WJA.TO) dipped 1.34 percent, while Air Canada (ACB.B.TO) plummeted 7.00 percent.

HudBay Minerals Inc. (HBM.TO) dropped 2.33 percent and Augusta Resource Corp. (AZC.TO) surged 7.50 after the two on Monday announced a definitive support agreement, under which HudBay lifted its offer for Augusta shares not already owned by the firm. The revised offer represents a total equity value of C$555 million.

Centric Health Corp. (CHH.TO) jumped 5.48 percent after reaching a definitive agreement to sell its MEDIchair and Motion Specialties retail home medical operations to Canadian-based Birch Hill Equity Partners for C$50 million.

SNC-Lavalin Group Inc. (SNC.TO) gained 1.74 percent after announcing it will be acquiring U.K.-based global engineering firm Kentz Corp. Ltd. for $2.1 billion.

WaterFurnace Renewable Energy Inc. (WFI.TO) soared 19.74 percent an agreement with NIBE Industrier AB (publ) of Sweden, as per which NIBE will acquire 100% of the outstanding shares of WaterFurnace by way of a plan of arrangement. The agreement provides WaterFurnace shareholders with C$30.60 in cash for each WaterFurnace share held.

Botox maker Allergan Inc. (AGN) on Monday urged its shareholders not to tender their shares to Canadian drug maker Valeant Pharmaceuticals International Inc.'s (VRX.TO) unsolicited exchange offer. Valeant Pharmaceuticals dropped 1.40 percent.

On the economic front, data released by the National Association of Realtors showed U.S. existing home sales to have increased by a more than expected 4.9 percent to a seasonally adjusted 4.89 million in May, from an upwardly revised 4.66 million in April. The consensus estimate called for existing home sales to come in at a seasonally adjusted annual rate of 4.75 million units compared to a 4.65 million unit-annual rate in April.

Meanwhile, the Markit Economics flash manufacturing purchasing managers index for the U.S. came in with a reading of 57.5 for June, the best in over 4 years and up from a reading of 56.4 in May. Economists expected the index to rise to 56.5 in June.

In economic news from Asia, Markit said that Chinese manufacturing sector expanded for the first time in six months in June, with the HSBC flash manufacturing Purchasing Managers' Index rising to 50.8, from 49.4 in the previous month.

Meanwhile, eurozone private sector growth slowed for a second month running in June as downturn deepened in France. The headline index covering output of both manufacturing and services fell below forecast to 52.8 from 53.5 in May, flash survey data from Markit Economics showed.