TSX Ends Lower As Oil Prices Plummet -- Canadian Commentary

(RTTNews) - Canadian stocks ended lower for a second straight session on Monday, dragged down mostly by energy stocks as oil prices hit a near six-year low after having dipped below the $46 a barrel mark intraday on the international market.

The Canadian stock market has been under pressure since the beginning of the new trading week, as the price of oil continued to plummet. The mood among investors has been more subdued Monday, following the volatility of the previous week.

Investors are now gearing up for the start of the earnings season in the United States, which unofficially kicked-off with Alcoa's earnings report.

Alcoa Inc. (AA.NYSE) reported a fourth-quarter profit of $159 million or $0.11 per share, compared to a net loss of $2.3 billion or $2.19 per share for the year-ago quarter. Excluding special items, adjusted net income for the fourth quarter was $432 million or $0.33 per share, compared to $40 million or $0.04 per share in the prior year quarter.

With little or no economic data released today for direction, investors will be focused on the release of the U.S. retail sales data scheduled for Wednesday.

The benchmark S&P/TSX Composite Index closed Monday at 14,265.01, down 119.91 points or 0.83 percent. The index scaled an intraday high of 14,378.32 and a low of 14,122.38.

On Friday, the index closed down 72.80 points or 0.50 percent, at 14,384.92. The index scaled an intraday high of 14,496.91 and a low of 14,325.15.

Crude oil plunged to end at a near six-year low on continued worries of oversupply, with Goldman Sachs and Societe Generale slashing its outlook for crude prices.

Goldman Sachs revised its three-month forecast for Nymex crude to $41 a barrel, down from its prior projection of $70 a barrel. The six-month forecast was lowered to $39 a barrel, compared to a previous projection of $75. Crude oil is now projected at $65 a barrel in a year, while it was previously forecast at $80.

Meanwhile, Societe Generale also lowered its oil price projection for Nymex crude and expects prices to average $51 a barrel in the first six months of the year, due to a buildup in inventories.

The Energy Index plunged 4.60 percent, with U.S. crude oil futures for February delivery plummeting $2.29 or 4.7 percent to close at $46.07 a barrel on the Nymex Monday.

Among energy stocks, ARC Resources Ltd. (ARX.TO) plunged 5.33 percent, Canadian Natural Resources Limited (CNQ.TO) fell 4.10 percent, Suncor Energy Inc. (SU.TO) shed 3.62 percent, and Canadian Oil Sands Limited (COS.TO) plummeted 8.90 percent.

Pacific Rubiales Energy Corp. (PRE.TO) plunged 10.54 percent, Encana Corp. (ECA.TO) fell 2.32 percent, Crescent Point Energy (CPG.TO) dived 4.89 percent and Cenovus Energy Inc. (CVE.TO) surrendered 3.12 percent.

Gold futures ended sharply higher with investors seeking its safe haven as global equity markets declined with oil prices continuing to plummet to new depths.

The Global Gold Index jumped 4.95 percent, with gold for February delivery jumping $16.70 or 1.4 percent to settle at $1,232.80 an ounce on the New York Mercantile Exchange Monday.

Among gold stocks, Yamana Gold Inc. (YRI.TO) jumped 7.17 percent, Agnico Eagle Mines Limited (AEM.TO) gained 4.85 percent, and Goldcorp Inc. (G.TO) gathered 4.38 percent.

Eldorado Gold Corp. (ELD.TO) added 5.14 percent, Barrick Gold Corp .(ABX.TO) gained 4.14 percent, and Franco-Nevada Corp. (FNV.TO) gathered 4.94 percent.

The Capped Materials Index gained 1.73 percent, mostly on rising gold stocks, with Potash Corp. of Saskatchewan Inc. (POT.TO) up 1.17 percent.

The heavyweight Financial Index dropped 0.98 percent, as National Bank of Canada (NA.TO) plunged 3.15 percent, Toronto-Dominion Bank (TD.TO) surrendered 0.95 percent, and Bank of Nova Scotia (BNS.TO) dived 1.49 percent.

Royal Bank of Canada (RY.TO) fell 0.86 percent, while Bank of Montreal (BMO.TO) surrendered 0.96 percent. Canadian Imperial Bank of Commerce (CM.TO) lost 0.80 percent.

The Healthcare Index moved up 0.15 percent, with Valeant Pharmaceuticals International, Inc. (VRX.TO) gaining 2.13 percent, Catamaran Corp. (CCT.TO) down 0.03 percent, and Extendicare Inc. (EXE.TO) shedding 1.66 percent.

The Diversified Metals & Mining Index plunged 3.79 percent, as Teck Resources Limited (TCK.B.TO) shed 3.59 percent, First Quantum Minerals Ltd. (FM.TO) plunged 6.45 percent, and Finning International Inc. (FTT.TO) dropped 2.36 percent. Lundin Mining Corp. (LUN.TO) surrendered 5.85 percent.

The Capped Industrials Index dropped 0.81 percent, with Bombardier Inc. (BBD.B.TO) up 0.26 percent and Air Canada (AC.TO) up 1.14 percent.

The Information Technology Index fell 1.26 percent, with BlackBerry Limited (BB.TO) shedding 1.78 percent, Sierra Wireless (SW.TO) down 1.85 percent, and Constellation Software (CSU.TO) down 1.42 percent. Descartes Systems Group Inc. (DSG.TO) slipped 0.85 percent.

Onex Corp. (OCX.TO) slipped 0.06 percent, with the company agreeing to acquire Survitec Group Ltd for $680 million.

In economic news, the French economy expanded 0.1 percent in the fourth quarter, according to the third estimate of Bank of France, published on Monday. The estimate was unchanged from the prior forecast.

The business confidence in manufacturing dropped slightly to 96 in December from 97 in November. Business leaders expect a rebound in production in January.

Germany's manufacturing turnover declined in November after recovering in the previous month, data from Destatis showed Monday. Manufacturing turnover dropped by a seasonally and working-day adjusted 0.4 percent month-on-month in November, reversing a 1.2 percent rise logged in October. In September, the turnover fell 0.2 percent.

In economic news, a report from the statistical offices in France and Italy, and Germany's Ifo Institute on Monday showed the euro area region set to expand moderately in the first and second quarters of 2015. Gross domestic product is forecast to grow 0.3 percent each in the first and second quarters, mainly driven by domestic demand. Investment is set to pick up moderately. It is forecast to grow 0.2 percent in the first quarter and 0.3 percent in second quarter.

Meanwhile, the Organization for Economic Cooperation and Development said the leading index signaled stable growth momentum in the region as a whole but with diverging patterns across most major economies. The composite leading index came in at 100.5 in November, up from 100.4 in October.

The indicator suggests stable growth momentum for the United States, Canada and China, while it indicated a loss of growth momentum in Germany, Italy and Russia. The index pointed to relatively lower level of momentum in France, Brazil and in the euro area as a whole.

Elsewhere in Asia, Japan raised the economic growth estimates marginally for fiscal year 2015. The real economic growth is estimated to reach 1.5 percent compared to the prior forecast of 1.4 percent, the Cabinet Office said Monday.