TSX Up On Growth Optimism - Canadian Commentary

(RTTNews) - Canadian stocks were extending gains for a third session Friday morning amid optimism over the recovery in the world's largest economy after the US Federal Reserve signaled QE tapering. Further, today's upbeat economic growth data out of the US helped lift trader sentiment.

Elsewhere, Asian stocks settled mixed overnight following flat close on Wall Street, with concerns about tight liquidity conditions in China turning investor mood somewhat cautious. Meanwhile, European shares are moving higher after a survey revealed that German consumer confidence is set to rise to its highest level in more than six years in January.

The S&P/TSX Composite Index gained 103.10 points or 0.77 percent to 13,495.30, after gaining over 200 points or nearly 2 percent in the past two straight sessions.

The price of crude oil was steady near its 2-month high Friday morning as traders digest the US GDP data. Crude for February eased $0.14 to $98.90 a barrel.

In the oil patch, Vermilion Energy (VET.TO) and Suncor Energy (SU.TO) were up around 1 percent each, while Niko Resources (NKO.TO) jumping over 6 percent.

In the financial space, TD Bank (TD.TO), Scotiabank (BNS.TO) and CIBC (CM.TO) gained around 1 percent each.

The price of gold was lingering near its three-year low Friday morning, with the US dollar trading firm after Federal Reserve signaled QE tapering. Gold for February edged up $9.60 to $1,203.20 an ounce.

Among gold stocks, Goldcorp. (G.TO), Agnico-Eagle Mines (AEM.TO) and Barrick Gold (ABX.TO) gathered around 1 percent each.

Smart-phone maker BlackBerry Ltd. (BB.TO) jumped 9 percent even after slipping into the red in third-quarter, reporting loss from continuing operations of $4.4 billion or $8.37 per share versus an income of $14 million or $0.03 per share last year. On an adjusted basis, loss from continuing operations before charges, was $354 million or $0.67 per share. Analysts expected loss per share of $0.45 for the quarter. Separately, BlackBerry signed a five-year strategic partnership with Foxconn, a manufacturer of electronic products and components.

Commercial real estate owner Brookfield Property Partners L.P. (BPY_UN.TO) slipped 1 percent after reporting increasing the offer price regarding its proposal to acquire the common shares of Brookfield Office Properties Inc. (BPO.TO) by raising the cash portion of the consideration by $1 a share to $20.34 a share of BPO.

Equipment finance companies Element Financial Corp. (EFN.TO) announced acquisitions comprised of approximately $348 million worth of helicopter and railcar finance assets from GE Capital and Trinity Industries, Inc. respectively. Separately, the company said it has closed its previously announced new US$600 million committed debt facility, underwritten by BMO Capital Markets and a syndicate of financial institutions The stock edged up 0.50 percent.

In economic news, Statistics Canada said inflation rose 0.9 percent in the 12 months to November, following a 0.7 percent increase in October. Meanwhile, the Bank of Canada's core index rose 1.1 percent in the 12 months to November, after increasing 1.2 percent in October. On a monthly basis, the seasonally adjusted core index posted no change in November for the second consecutive month.

In a separate report, the agency said retail sales edged down 0.1 percent in October to $40.7 billion, recording its first loss in four months. Lower sales at motor vehicle and parts dealers were not entirely offset by gains in food and beverage stores.

From the U.S., the Commerce Department said gross domestic product increased by 4.1 percent in the third quarter compared to the 3.6 percent growth estimated earlier this month. Economists had expected the pace of GDP growth to be unrevised.

From the euro zone, German consumer confidence is set to rise to its highest level in more than six years in January, a survey by market research group GfK revealed. The forward-looking consumer climate index for January rose to 7.6 in from 7.4 in December. Economists had forecast the index to remain at the December level.

Meanwhile, Standard & Poor's lowered the sovereign ratings of the European Union from 'AAA' on Friday, citing deterioration in overall creditworthiness of member states amid contentious EU budgetary negotiations. The long-term ratings were lowered to 'AA+', while it affirmed short-term credit rating at 'A-1+'. The 'stable' outlook reflects the assessment that the risks to the long-term rating on the EU are balanced, S&P said.

Elsewhere, the British economy expanded 0.8 percent quarter-on-quarter in the third quarter, unrevised from the second estimate published on November 27, the Office for National Statistics said in the latest estimates released . However, the statistical agency slightly revised up the GDP figure for the second quarter to show a 0.8 percent expansion compared with the previously reported 0.7 percent growth.