TSX Ends Sharply Lower On Global Growth Concerns -- Canadian Commentary

(RTTNews) - Canadian stocks snapped a three-day gain to end sharply lower on Friday, with global markets under pressure as investors mulled the the U.S. Federal Reserve's decision not to raise interest rates citing concerns over the health of the global economy.

The majority of the Canadian sectors ended in the red, with the major losers being the mining, energy, and financial sectors.

The Federal Reserve decided against raising interest rates yesterday, due to concerns over global economic headwinds, volatility in the stock market and anemic inflation. Most Fed officials have said that a rate hike would be appropriate this year given the recent pace of economic activity.

The central bank's economic growth projections were lowered, and policy makers expressed concerns over the economic headwinds including problems in China.

If the Fed is going to raise rates this year, it will likely be in December since there is no scheduled press conference after the upcoming October meeting. Yellen said that October is a "live meeting" that could produce a rate hike, but most Fed watchers think she will want a chance to soothe investors if there is a market tantrum.

U.S. markets ended sharply lower as traders weighed Thursday's Federal Reserve decision not to hike interest rates. The major averages climbed off their worst levels going into the close but remained firmly in the red. The Dow plummeted 1.7 percent, the Nasdaq tumbled 1.4 percent, and the S&P 500 plunged 1.6 percent.

There were little economic indicators from the U.S. to go by, but a report from the Conference Board on Friday showed a slight uptick in its index of leading U.S. economic indicators in August, suggesting economic growth will remain moderate into next year.

The benchmark S&P/TSX Composite Index closed Friday at 13,646.90, down 140.26 points or 1.02 percent. The index scaled an intraday high of 13,692.58 and a low of 13,587.44.

On Thursday, the index closed up 23.38 points or 0.18 percent, at 13,787.16. The index scaled an intraday high of 13,876.00 and a low of 13,704.58.

The Diversified Metals & Mining Index plunged 4.69 percent as First Quantum Minerals (FM.TO) plummeted 8.43 percent, while Teck Resources Limited (TCK-B.TO) dived 6.77 percent.

Lundin Mining Corporation (LUN.TO) dropped 4.59 percent, while HudBay Minerals Inc. (HBM.TO) plummeted 5.96 percent.

Sherritt International (S.TO) plunged 6.00 percent, after its Board suspended the $0.01 per share quarterly dividend.

The heavyweight Financial Index dropped 1.63 percent, as Royal Bank of Canada (RY.TO) dropped 2.11 percent while National Bank of Canada (NA.TO) shed 2.10 percent.

Toronto-Dominion Bank (TD.TO) fell 1.86 percent, Bank of Nova Scotia (BNS.TO) shed 1.78 percent, Canadian Imperial Bank Of Commerce surrendered 1.53 percent, and Bank of Montreal (BMO.TO) dropped 1.36 percent.

Crude oil prices plummeted Friday on demand growth worries as traders weighed the Federal Reserve's cautious assessment of the global economy.

The Energy Index dived 2.23 percent, with U.S. crude oil futures for October delivery plunging $2.22 or 4.7 percent, to settle at $44.68 a barrel on the New York Mercantile Exchange Friday.

Among energy stocks, Crescent Point Energy Corp. (CPG.TO) fell 1.50 percent, Canadian Natural Resources Limited (CNQ.TO) dropped 3.58 percent, and Encana Corp. (ECA.TO) dived 5.16 percent.

Canadian Oil Sands (COS.TO) surrendered 4.86 percent, Suncor Energy Inc. (SU.TO) declined 3.07 percent, and Baytex Energy Corp. lost 3.86 percent.

Cenovus Energy (CVE.TO) gained 2.77 percent.

Gold futures rallied to end sharply higher on Friday in the aftermath of yesterday's Federal Reserve decision not to raise interest rates, with investors seeking the safe haven appeal of the precious metal.

The Gold Index gained 0.88 percent, as gold for December delivery surged $20.80 or 1.9 percent, to settle at $1,137.80 an ounce on the New York Mercantile Exchange Friday.

Among gold stocks, Yamana Gold Inc. (YRI.TO) gained 0.44 percent, Barrick Gold (ABX.TO) shed 0.67 percent, Goldcorp Inc. (G.TO) added 0.22 percent, and Eldorado Gold (ELD.TO) gathered 4.01 percent.

Kinross Gold Corp. (K.TO) surged 8.04 percent after slashing its its capital-spending guidance for the year and announced that production for the year will be at the high end of its prior guidance.

The Capped Materials Index fell 0.94 percent, with Agnico Eagle Mines Limited (AEM.TO) up 1.06 percent, Agrium Inc. (AGU.TO) down 2.22 percent, and Potash Corp. of Saskatchewan Inc. (POT.TO) shedding 2.42 percent.

Franco-Nevada Corp. (FNV.TO) gathered 0.82 percent, while Silver Wheaton (SLW.TO) fell 0.79 percent.

The Capped Health Care Index moved up 0.90 percent, as Valeant Pharmaceuticals International (VRX.TO) moved up 0.54 percent, Extendicare Inc. (EXE.TO) moved up 2.16 percent, and Concordia Healthcare Corp. (CXR.TO) ended flat at C$96.50 a share.

The Capped Information Technology Index inched up 0.24 percent, as BlackBerry Limited (BB.TO) fell 0.30 percent, and Descartes Systems Group (DSG.TO) moved up 0.34 percent.

Constellation Software (CSU.TO) inched up 0.01 percent, Sierra Wireless (SW.TO) shed 0.89 percent and Avigilon (AVO.TO) gathered 1.34 percent.

The Capped Telecommunication Index gathered 1.21 percent, as Rogers Communication (RCI-B.TO) jumped 3.09 percent, BCE Inc. (BCE.TO) gained 0.71 percent, and TELUS Corp. (T.TO) added 1.14 percent. Manitoba Telecom Services Inc. (MBT.TO) shed 0.21 percent.

The Capped Industrials Index fell 1.67 percent, as Bombardier (BBD-B.TO) dropped 1.69 percent, Finning International Inc. (FTT.TO) dived 4.95 percent, and Air Canada shed 1.63 percent.

ViXS Systems (VXS.TO) soared 20.59 percent, after the appointment of Sohail Khan as President and Chief Executive Officer of the company, effective immediately.

On the economic front, data from Statistics Canada showed that Canada's consumer price index rose 1.3 percent on year in August, the same rate as in July. That matched economists' expectations.

The Bank of Canada's core consumer price index advanced 2.1 percent in August, in line with forecasts. In July, the CPI grew 2.4 percent.

On a monthly basis, consumer prices came in flat in August, while the Bank of Canada's core consumer price inflation grew 0.2 percent. Both the readings were in line with forecasts.

In economic news from the U.S., a report from the Conference Board on Friday showed a slight uptick in its index of leading U.S. economic indicators in August, suggesting economic growth will remain moderate into next year.

The Conference Board's leading economic index inched up 0.1 percent in August, while revised data showed no change in July. Economists expected the index to rise by 0.2 percent compared to the 0.2 percent drop originally reported for the previous month.

Eurozone current account surplus declined in July as the deficit on secondary income widened from June, the European Central Bank reported Friday. The current account surplus decreased to EUR 22.6 billion in July from EUR 24.9 billion in June.