TSX Ends Sharply Higher After Fed Decision -- Canadian Commentary

(RTTNews) - Canadian stocks ended sharply higher for a second straight session on Wednesday, tracking rising global equity markets after the U.S. Federal Reserve decided against raising interest rates, preferring to wait for more confirmation that the economy is on solid ground.

The surge was led by financial, energy and mining stocks, with all sectors except health care ending in positive territory.

The majority of the European markets ended on the upside Wednesday, driven by positive earnings reports in Europe coupled with signs of stability in China boosting investor sentiment. Chinese authorities hinted at more policy easing to boost liquidity and pledged to buy shares to stabilize the market following record losses in the last few days.

Markets in the United States also ended in positive territory after the Federal Reserve's monetary policy announcement earlier today.

The Fed's Federal Open Market Committee on monetary policy refrained from any decision on rate hike. Since there was no post-decision press conference scheduled this month, the Fed's decision to stand pat was in line with market expectations.

Analysts, meanwhile, continue to expect the central bank to begin raising interest rates at its next meeting in September or December. A move is far more likely in September or December when Fed Chair Janet Yellen has the opportunity to calm investor fears at scheduled press conferences.

Pending home sales in the U.S. unexpectedly decreased in the month of June, according to a report released by the National Association of Realtors on Wednesday, with pending sales pulling back off a nine-year high.

The benchmark S&P/TSX Composite Index closed Wednesday at 14,301.80, up 224.44 points or 1.59 percent. The index scaled an intraday high of 14,303.81 and a low of 14,059.28.

On Tuesday, the index closed up 75.99 points or 0.54 percent, at 14,077.36. The index scaled an intraday high of 14,104.30 and a low of 13,938.90.

Gold futures ended lower on a strong dollar, with a stronger dollar and expectations of a Federal Reserve rate hike have denting demand for the precious metal, having recently suffered the worst losing streak in two decades.

The Gold Index gained 2.14 percent, although gold for August delivery dropped $3.60 or 0.3 percent, to settle at $1,092.60 an ounce on the New York Mercantile Exchange Wednesday.

Among gold stocks, Kinross Gold Corp. (K.TO) surged 7.34 percent, Goldcorp Inc. (G.TO) added 1.83 percent, and IAMGOLD Corp. climbed 3.30 percent.

B2Gold Corp. (BTO.TO) gathered 0.69 percent, while Lake Shore Gold Corp. (LSG.TO) moved up 2.68 percent. Barrick Gold Corp. (ABX.TO) soared 5.16 percent.

The Capped Materials Index gained 1.26 percent, as Potash Corp. of Saskatchewan Inc. (POT.TO) fell 1.61 percent, Agrium Inc. (AGU.TO) moved up 0.37 percent, and Agnico Eagle Mines Limited (AEM.TO) added 1.41 percent.

Crude oil futures ended sharply higher after official data from the Energy Information Administration showed crude stockpiles in the U.S. to have declined much more than expected last week.

A weekly report from the U.S. Energy Information Administration said U.S. crude oil inventories declined 4.2 million barrels in the week ended July 24, while analysts expected stocks to decline 0.7 million barrels. The report showed total U.S. crude oil inventories at 459.7 million barrels end last week.

The Energy Index soared 2.89 percent, with U.S. crude oil futures for September delivery, the most actively traded contract, jumping $0.81 or 1.7 percent, to settle at $48.79 a barrel on the New York Mercantile Exchange Wednesday.

Among energy stocks, Suncor Energy Inc. (SU.TO) surged 4.34 percent, while Canadian Natural Resources Limited (CNQ.TO) moved up 1.25 a share. Crescent Point Energy Corp. (CPG.TO) added 1.57 percent, while Enbridge Inc. (ENB.TO) added 0.16 percent.

Encana Corp. (ECA.TO) moved up 2.44 percent, Canadian Oil Sands Limited (COS.TO) added 3.36 percent, and Pacific Rubiales Energy Corp. (PRE.TO) gained 2.27 percent.

Husky Energy Inc. (HSE.TO) shed 0.04 percent, after having jumped 4.21 percent yesterday.

The Diversified Metals & Mining Index added 2.49 percent, as Teck Resources Limited (TCK-B.TO) climbed 2.33 percent and Lundin Mining Corp. (LUN.TO) jumped 4.19 percent.

First Quantum Minerals (FM.TO) gained 2.17 percent, while HudBay Minerals (HBM.TO) climbed 3.63 percent.

Sherritt International (S.TO) soared 16.30 percent, after reporting second quarter adjusted net loss from continuing operations that widened to $75.2 million or $0.25 per share, from $56.2 million or $0.19 per share a year earlier. The stock had plummeted over 11 percent on Monday.

Capstone Mining Corp. (CS.TO) jumped 5.56 percent, after reporting second quarter adjusted earnings of $0.00 per share, down from $0.05 per share last year.

The heavyweight Financial Index moved up 2.42 percent, as National Bank of Canada (NA.TO) gathered 2.87 percent, Bank of Montreal (BMO.TO) added 0.69 percent, and Royal Bank of Canada (RY.TO) jumped 2.76 percent.

Canadian Imperial Bank of Commerce (CM.TO) moved up 1.84 percent, Bank of Nova Scotia (BNS.TO) surged 3.16 percent, and Toronto-Dominion Bank (TD.TO) jumped 2.87 percent.

The Capped Health Care Index dropped 0.36 percent as Valeant Pharmaceuticals International, Inc. (VRX.TO) slipped 1.23 percent, Extendicare Inc. (EXE.TO) fell 0.12 percent, and Concordia Healthcare Corp. (CXR.TO) moved up 0.80 percent.

The Capped Information Technology Index moved up 0.83 percent, as BlackBerry Limited (BB.TO) gained 2.88 percent, Descartes Systems Group (DSG.TO) added 0.99 percent, and Constellation Software Inc. (CSU.TO) moved up 3.10 percent. CAE Inc. (CAE.TO) added 1.44 percent.

The Capped Telecommunication Index inched up 0.23 percent, as Rogers Communication (RCI-B.TO) shed 0.46 percent, TELUS Corp. (T.TO) inched up 0.07 percent, Manitoba Telecom Services Inc. (MBT.TO) added 0.73 percent, and BCE Inc. (BCE.TO) gathered 0.63 percent.

The Capped Industrials Index jumped 2.60 percent, as Bombardier (BBD.B.TO) soared 7.14 percent, after the Wall Street Journal reported that the company is involved in early talks with Germany's Siemens to merge their rail businesses.

Canadian Pacific Railway Limited (CP.TO) added 2.80 percent, while Canadian National Railway Company (CNR.TO) climbed 1.77 percent. Air Canada (AC.TO) gathered 3.47 percent.

Wi-Lan Inc. (WIN.TO) fell 3.14 percent, after reporting a second quarter profit that increased to $0.09 from $0.05 a year ago.

CGI Group Inc. (GIB-A.TO) fell 3.76 percent after reporting an increase in its third quarter profit to C$0.80 per share from C$0.71 per share last year, but but just short of analysts' estimates of C$0.81 per share.

In economic news, pending home sales in the U.S. unexpectedly declined in June, a report from the National Association of Realtors showed Wednesday, with pending sales pulling back off a nine-year high. NAR said its pending home sales index fell by 1.8 percent to 110.3 in June, while economists had expected the index to increase by 1.0 percent.

German consumer morale is set to stabilize in August as income expectations improved further from record level on strong domestic fundamentals, survey data from market research group GfK revealed Wednesday. Nonetheless, consumers assumed that the solution reached in the Greece debt dispute will have negative consequences on the economy. The forward-looking consumer sentiment index came in at 10.1 points, unchanged from July and in line with expectations.

French consumer confidence decreased unexpectedly in July after improving in the previous month, survey data from the statistical office INSEE showed Wednesday. The consumer confidence index dropped slightly to 93 in July from 94 in June. Economists had expected the index to remain stable at 94.0.

U.K. mortgage approvals increased more than expected in June and secured lending climbed most since 2008, data from the Bank of England showed Wednesday. The number of loan approvals for house purchase totaled 66,582 in June, up from 64,826 in May. It was forecast to increase marginally to 66,000.