TSX Ends Higher On China Stimulus Move -- Canadian Commentary

(RTTNews) - Canadian stocks snapped a two-day loss to to end higher Monday, as investors cheered China's move to provide an unexpected stimulus. Mining and financial stocks were among the best performers, with with energy stocks also making gains as oil prices rose.

In a bid to shore up its economy, China's central bank over the week end slashed its reserve requirement ratio for banks, or the amount of deposits banks require to hold as reserves, to 18.5 percent from 19.5 percent. Notably, the move comes after China just reported its economy grew at the slowest pace in six years during the fourth quarter.

Nevertheless, the gains were somewhat muted amid continued worries over Greece. It is likely Greek banks may soon run out of collateral to access European Central Bank refinancing unless Athens reaches a deal over the release of another 7.2 billion euros in bailout funds from the European Union. A meeting of euro-area finance ministers will be held in Latvia on April 24.

Greece is in imminent danger of defaulting if bailout aid fund from international creditors are not made available, even as discussions over an extension remained inconclusive.

Meanwhile, Greek finance minister Yanis Varoufakis is reported to have warned of contagion if Greece leaves the eurozone. However, European Central Bank President Mario Draghi brushed aside such speculations, stating that the single eurozone currency is irrevocable.

Markets in Europe are ended on a positive note, despite lingering concerns over Greece, while major averages in the US also ended in the green. The gains by Wall Street came amid news of additional Chinese stimulus after reports about new trading regulations in China contributed to the sharp pullback in the previous session.

Earnings news were also in focus, on what will be the heaviest week of reporting. Morgan Stanley, Halliburton and Hasbro all exceeded expectations this morning.

The benchmark S&P/TSX Composite Index closed Monday at 15,412.60, up 52.05 points or 0.34 percent. The index scaled an intraday high of 15,483.12 and a low of 15,376.78.

On Friday, the index closed down 26.22 points or 0.17 percent, at 15,360.55, with an intraday high of 15,367.56 and a low of 15,275.53, amid worries over Greece and weakness in China after some new trading regulations.

Gold futures ended as investors weighed China's move to provide an unexpected stimulus, even as uncertainties over Greece's financial health remained.

The Gold Index moved up 0.25 percent, although with gold for June delivery dropped $9.40 or 0.8 percent, to settle at $1,193.70 an ounce on the New York Mercantile Exchange Monday.

Goldcorp Inc. (G.TO) shed 1.12 percent, while Yamana Gold Inc. (YRI.TO) ended flat at $4.92 a share.

Among other gold stocks, Kinross Gold Corp (K.TO) gained 0.71 percent, Eldorado Gold Corp. (ELD.TO) moved up 0.83 percent, and Barrick Gold Corp. (ABX.TO) down 0.06 percent.

Crude oil prices ended higher on China's move to prop up its economy and with stockpiles at Cushing delivery point dwindling. The gains were trimmed as Saudi Arabia again refrained from curbing production despite massive global stockpiles.

The Energy Index moved up 0.27 percent, with U.S. crude oil futures for May delivery, the most actively traded contract, gaining $0.64 or 1.2 percent, to settle at $56.38 a barrel on the New York Mercantile Exchange Monday.

Among energy stocks, Bonterra Energy (BNE.TO) advanced 1.35 percent, while Legacy Oil + Gas Inc. (LEG.TO) surged 5.86 percent.

Suncor Energy Inc. (SU.TO) added 0.37 percent, Canadian Natural Resources Limited (CNQ.TO) shed 0.73 percent, and Canadian Oil Sands Limited (COS.TO) gained 1.85 percent.

Crescent Point Energy Corp. (CPG.TO) moved up 0.28 percent, while Cenovus Energy Inc. (CVE.TO) added 0.69 percent. Encana Corp. (ECA.TO) gained 3.76 percent, while Pacific Rubiales Energy Corp. (PRE.TO) added 0.52 percent.

The Capped Materials Index added 0.25 percent, with Potash Corp. of Saskatchewan Inc. (POT.TO) down 0.58 percent and Agrium Inc. (AGU.TO) dropped 1.78 percent.

The Diversified Metals & Mining Index gained 2.34 percent, as First Quantum Minerals Ltd. (FM.TO) jumped 6.88 percent and Lundin Mining Corp. (LUN.TO) added 1.40 percent.

Teck Resources (TCK.B.TO) gathered 2.55 percent, while Finning International Inc. (FTT.TO) shed 0.32 percent.

The heavyweight Financial Index gathered 0.50 percent, as Bank of Nova Scotia (BNS.TO) gained 0.79 percent and Bank of Montreal (BMO.TO) added 0.53 percent.

National Bank of Canada (NA.TO) moved up 0.27 percent, Royal Bank of Canada (RY.TO) rose 0.63 percent, Toronto-Dominion Bank (TD.TO) dropped 0.72 percent, and Canadian Imperial Bank of Commerce (CM.TO) gained 1.17 percent.

The Capped Health Care Index fell 0.16 percent, as Extendicare (EXE.TO) gathered 0.91 percent, Valeant Pharmaceuticals International, Inc. (VRX.TO) ended flat at $251.14 a share.

Catamaran Corp. (CCT.TO) added 0.15 percent, and Concordia Healthcare (CXR.TO) dropped 0.97 percent.

The Capped Industrials Index added 1.00 percent, with Bombardier Inc. (BBD.B.TO) down 0.37 percent and Canadian Pacific Railway Limited (CP.TO) up 2.21 percent. Canadian National Railway Company (CNR.TO) added 2.65 percent,.

The Information Technology Index dipped 0.04 percent, with BlackBerry Limited (BB.TO) gaining 1.24 percent.

Among other tech stocks, Constellation Software Inc. (CSU.TO) dipped 0.62 percent, Sierra Wireless, Inc. (SW.TO) dived 1.51 percent, and Descartes Systems Group Inc. (DSG.TO) down 1.30 percent.

The Capped Telecommunication Index slipped 0.50 percent, with BCE Inc. (BCE.TO) edging up 0.05 percent and Rogers Communications Inc. (RCI.B.TO) adding 0.77 percent. Manitoba Telecom Services Inc. (MBT.TO), dropped 2.30 percent.

Nobilis Health (NHC.TO) jumped 6.35 percent, after having agreed to acquire a controlling stake in Victory Healthcare Houston Hospital.

Among other economic news, eurozone construction output declined for the first time in three months in February, Eurostat reported Monday. Construction output fell 1.8 percent in February from January, when it grew 1.6 percent. This was the first fall in three months and the biggest drop since September.

Germany's producer prices declined at a faster-than-expected pace in March, figures from Destatis showed Monday. The producer price index fell 1.7 percent year-over-year in March, surpassing economists' expectations for a 1.6 percent decrease.

The average asking price for a house in the United Kingdom was up 1.6 percent on month in April, property tracking website Rightmove said on Monday, coming in at a record 286,133 pounds. That follows the 1.0 percent increase in March.