TSX Sluggish, Unable To Breach Record Highs -- Canadian Commentary

(RTTNews) - Canadian stocks are a bit sluggish Monday mid morning with investors digesting some mixed global economic data and keenly monitoring the situation in Iraq.

While a positive reading on Chinese manufacturing activity in June and better than expected reports on U.S. manufacturing activity and retail sales are aiding sentiment, a weak reading on eurozone private sector growth appears to be hurting a bit.

The mood is generally cautious with investors watching the developments in Iraq. According to reports, Sunni militants are marching toward Baghdad, seizing more cities in Northern Iraq on the way. Meanwhile, US Secretary of State John Kerry is in Baghdad to broker a deal between the government and political opponents.

Energy stocks are struggling a bit. Gold stocks are seeing some strong buying. Shares from industrial and technology sections are turning in a mixed performance.

The benchmark S&P/TSX Composite Index is down 23.97 points or 0.16 percent at 15,085.00, after advancing to 15,117.95 earlier.

The index continued to hover near its all-time high of 15,154.77 recorded on June 6, 2008.

HudBay Minerals Inc. (HBM.TO) and Augusta Resource Corp. (AZC.TO) Monday announced that they have entered into 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.

Under the revised offer, along with HudBay's initial offer of 0.315 per share, Augusta shareholders will also receive 0.17 of a warrant to acquire a common share of Hudbay for each Augusta common share. The total consideration now works out to approximately C$3.56 per Augusta common share. HudBay Minerals shares are down 2.2 percent, while shares of August Resource Corp. are climbing over 8 percent.

Centric Health Corp. (CHH.TO) is up nearly 10 percent after the company announced that it reached 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) has announced that it will be acquiring U.K.-based global engineering firm Kentz Corp. Ltd. for $2.1 billion. The stock is moving up 2.8 percent.

WaterFurnace Renewable Energy Inc. (WFI.TO) shares are vaulting nearly 20 percent after the company entered into 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. As per the agreement, WaterFurnace shareholders will receive 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 is declining 1.2 percent.

Among other top stocks in the healthcare sector, Catamaran Corporation (CCT.TO) is down 1.3 percent and Extendicare Inc. (EXE.TO) is lower by about 0.3 percent.

Among the stocks in the energy sector, Bankers Petroleum (BNK.TO), Cenovus Energy (CVE.TO), Delphi Energy Corp. (DEE.TO), and Canadian Natural Resources (CNQ.TO) are up 1 to 2 percent.

Meanwhile, Surge Energy (SGY.TO), Twin Butte Energy (TBE.TO), ARC Resources (ARX.TO), Encana Corporation (ECA.TO) and Crescent Point Energy Corp. (CPG.TO) are down with modest losses.

Gold stocks Trimmins Gold Corp. (TMM.TO), Goldcorp Inc. (G.TO), Barrick Gold Corporation (ABX.TO), B2Gold Corp. (BTO.TO), Detour Gold Corporation (DGC.TO), Silver Wheaton Corp. (SLW.TO) are rising 2 to 4 percent. Fanco-Nevada Corporation (FNV.TO) and Yamana Gold (YRI.TO) are also notably higher.

Among big six banks, Toronto-Dominion Bank (TD.TO), Bank of Nova Scotia (BNS.TO), Bank of Montreal (BMO.TO) and National Bank of Canada (NA.TO) are down 0.3 to 0.6 percent.

Industrial stocks Canadian National Railway Company (CNR.TO) and Canadian Pacific Railway Limited (CP.TO) are down 0.8 percent and 1.2 percent, respectively.

Among airliners, WestJet Airlines (WJA.TO) is losing about 1.3 percent, while Air Canada (ACB.B.TO) is declining over 4.5 percent.

In commodities, crude oil futures for August are down $0.48 or 0.46 percent at $106.34 a barrel, after advancing to $107.37 earlier.

Natural gas for August is down $0.056 or 1.22 percent at $4.497 per million btu.

Gold futures for August are up $0.30 or 0.02 percent at $1,316.90 an ounce.

Silver for September is down $0.062 or 0.3 percent at $20.932 an ounce. Meanwhile, copper is up $0.037 or 1.18 percent at $3.150 per pound amid hopes of increased demand following a better than expected reading on Chinese manufacturing activity.

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.