Canadian Stocks Are Falling On Continued China Weakness -- Canadian Commentary

(RTTNews) - The Canadian stock market is down sharply in early trade Thursday. The market has been declining since the start of the new year and has reached a 2-year low. Global equity markets are sinking again on continued concern over the situation in China.

A sharply lower yuan fix pulled China's Shanghai Composite index down over 7 percent within the first 30 minutes of trading today, prompting its second day-long suspension in four days. However, China announced hours after its early close that it has suspended its recently implemented circuit-breaker system.

The continued worry over China has sparked huge losses in mining and resource stocks in Canada. Energy stocks are also under heavy pressure as crude oil prices plunge to 11-year lows. Gold stocks are providing some relief, rising as investor flock to safe havens.

A day before the release of the closely watched U.S. monthly jobs report, the Labor Department released a report on Thursday showing that initial jobless claims pulled back by less than expected in the week ended January 2nd.

The report said initial jobless claims fell to 277,000, a decrease of 10,000 from the previous week's unrevised level of 287,000. Economists had expected jobless claims to drop to 272,000.

The benchmark S&P/TSX Composite Index is down 190.39 points or 1.50 percent at 12,536.41.

On Wednesday, the index closed down 193.34 points or 1.50 percent, at 12,726.80. The index scaled an intraday high of 12,854.57 and a low of 12,701.71.

The Diversified Metal and Mining Index is sinking 6.95 percent. First Quantum Minerals (FM.TO) is tumbling 11.74 percent and HudBay Minerals (HBM.TO) is losing 9.55 percent. Capstone Mining (CS.TO) is decreasing 10.13 percent and Lundin Mining (LUN.TO) is down 4.66 percent. Sherritt International (S.TO) is lower by 4.23 percent and Teck Resources (TCK-B.TO) is falling 5.88 percent.

The Energy Index is decreasing 2.95 percent. Crude oil prices continued to collapse Thursday morning, extending 11-year lows as major producers remained locked in a battle to maintain market share.

Crescent Point Energy (CPG.TO) is falling 6.46 percent and Cenovus Energy (CVE.TO) is down 3.23 percent. Canadian Natural Resources (CNQ.TO) is dropping 3.68 percent and Enbridge (ENB.TO) is losing 1.84 percent. Pacific Exploration & Production (PRE.TO) is lower by 4.58 percent and Husky Energy (HSE.TO) is slipping 2.39 percent. Imperial Oil (IMO.TO) is declining 1.47 percent and Encana (ECA.TO) is surrendering 3.88 percent.

Suncor Energy (SU.TO) is decreasing 2.43 percent and Canadian Oil Sands (COS.TO) is weakening by 0.13 percent. Suncor Energy today reminded shareholders of Canadian Oil Sands that its offer will expire at 8:00 p.m. ET on Friday, January 8, 2016.

The Capped Industrials Index is lower by 2.47 percent. AutoCanada (ACQ.TO) is losing 0.53 percent and Finning International (FTT.TO) is down 2.81 percent. Canadian Pacific Railway (CP.TO) is decreasing 3.43 percent and Canadian National Railway (CNR.TO) is surrendering 2.06 percent. Bombardier (BBD-A.TO) is weakening by 2.05 percent.

Air Canada (AC.TO) is declining 4.23 percent. The company reported a system-wide capacity increase of 7.3 percent in December and a load factor of 81.6 percent.

The Capped Health Care Index is lower by 2.09 percent. Concordia Healthcare (CXR.TO) is weakening by 2.69 percent and Valeant Pharmaceuticals International (VRX.TO) is lower by 0.97 percent. Extendicare (EXE.TO) is falling 0.76 percent.

Nobilis Health (NHC.TO) is plunging 22.02 percent. Chris Lloyd has resigned as CEO of the company, effective January 6, 2016. Current executive Chairman Harry Fleming, will become CEO effective immediately.

The Capped Information Technology Index is down 1.70 percent. Descartes Systems Group (DSG.TO) is falling 0.81 percent and Constellation Software (CSU.TO) is lower by 1.97 percent. Avigilon (AVO.TO) is losing 3.39 percent and Sierra Wireless (SW.TO) is weakening by 4.04 percent. BlackBerry (BB.TO) is decreasing 3.16 percent.

The heavyweight Financial Index is falling 1.50 percent. National Bank of Canada (NA.TO) is declining 1.07 percent and Toronto-Dominion Bank (TD.TO) is down 1.09 percent. Bank of Montreal (BMO.TO) is lower by 1.23 percent and Canadian Imperial Bank of Commerce (CM.TO) is losing 1.41 percent. Bank of Nova Scotia (BNS.TO) is surrendering 1.32 percent and Royal Bank of Canada (RY.TO) is decreasing 1.40 percent.

The Capped Telecommunication Services Index is losing 0.54 percent. TELUS (T.TO) is falling 0.82 percent and BCE (BCE.TO) is decreasing 0.42 percent.

Sandvine (SVC.TO) is rising 2.49 percent, after it reported fourth quarter EPS of $0.17.

The Gold Index is climbing 1.67 percent. Gold prices have surged above $1100 an ounce as jittery investors looked for a safe haven amid plunging oil prices, weak stocks and geopolitical problems.

Barrick Gold (ABX.TO) is advancing 5.54 percent and Eldorado Gold (ELD.TO) is rising 1.85 percent. Goldcorp (G.TO) is increasing 3.67 percent and Royal Gold (RGL.TO) is adding 1.50 percent. Kinross Gold (K.TO) is climbing 1.53 percent and Yamana Gold (YRI.TO) is higher by 0.71 percent. B2Gold (BTO.TO) is gaining 4.17 percent.

Centamin (CEE.TO) announced that production from its Sukari Gold Mine in Egypt was 117,644 ounces, an 8% decrease on fourth quarter of prior year. The stock is losing 2.17 percent.

The Capped Materials Index is also up 0.17 percent. Franco-Nevada (FNV.TO) is rising 1.13 percent and Agnico Eagle Mines (AEM.TO) is gaining 1.60 percent. Silver Wheaton (SLW.TO) is adding 0.81 percent.

Drugstore chain Jean Coutu Group Inc. (PJC_A.TO) on Thursday reported a 3 percent increase in profit for the third quarter from last year on higher revenues. Shares are up 0.28 percent.

Hudson's Bay Co. (HBC.TO) announced that it has agreed to acquire Gilt Groupe Holdings Inc. for $250 million in cash. The stock is falling 0.77 percent.

TransCanada (TRP.TO) is declining 2.20 percent. The company has filed a Notice of Intent to initiate a claim under Chapter 11 of the North American Free Trade Agreement or NAFTA in response to the U.S. Administration's decision to deny a Presidential Permit for the Keystone XL Pipeline on the basis that the denial was arbitrary and unjustified.

On the economic front, the euro area economic confidence and business sentiment strengthened in December, survey results from European Commission showed Thursday. The economic sentiment index rose to 106.8 in December from 106.1 in November. It was forecast to fall marginally to 106.

Eurozone's jobless rate fell for a third straight month in November to its lowest level in more than four years, figures from Eurostat showed Thursday. The seasonally adjusted unemployment rate dropped to 10.5 percent in November, which was the lowest level since October 2011.

Eurozone retail sales grew at the slowest pace in a year during November and was weaker than economists expected, figures from Eurostat showed Thursday. Retail sales increased a working-day adjusted 1.4 percent year-on-year after a 2.4 percent growth in October, revised from 2.5 percent. Economists were looking for 2 percent gain.

Germany's retail sales rose less-than-expected in November as the pace of growth slowed for a second straight month, preliminary data from Destatis showed Thursday. Retail sales grew 2.3 percent year-on-year following a 2.5 percent gain in October, revised from 2.1 percent. Economists had forecast 3.7 percent increase.

Germany's factory orders grew more than expected in November despite a fall in demand from the euro area, provisional data from Destatis revealed Thursday. Manufacturing new orders grew 1.5 percent in November from the prior month, bigger than an expected growth of 0.1 percent. Nonetheless, monthly growth eased from October's revised 1.7 percent increase.

Germany's construction sector activity expanded at the fastest pace in forty-five months in December, survey figures from Markit Economics showed Thursday. The seasonally adjusted Purchasing Managers' Index, or PMI, rose to 55.5 in December from 52.5 in the previous month.

U.K. house prices increased at a faster than expected pace in December, data published by Lloyds Banking Group's Halifax division showed Thursday. House prices climbed 1.7 percent in December from November when it remained flat. Economists had forecast only 0.5 percent rise.

In commodities, crude oil futures for February delivery are down $0.73 or 2.15 percent at $33.24 a barrel.

Natural gas for February is up 0.051 or 2.25 percent at $2.318 per million btu.

Gold futures for February are up $14.50 or 1.33 percent at $1,106.40 an ounce.

Silver for March is up $0.144 or 1.03 percent at $14.12 an ounce.