TSX Ends Sharply Lower As Oil Prices Plunge -- Canadian Commentary

(RTTNews) - Canadian stocks plunged 2.4 percent to end sharply lower on Wednesday, as oil prices plummeted after stockpiles in the U.S. improved more than expected and the Organization of Petroleum Exporting Countries once again slashed its demand forecast.

The Energy Information Administration said U.S. crude oil inventories increased more than expected last week, with gasoline stocks also surging. The OPEC today cut its 2015 demand forecast for crude oil to the lowest in 12 years. The cartel lowered its projection for 2015 by about 300,000 barrels a day, to 28.9 million a day.

Earlier today, Bank of America and Deutsche Bank slashed their oil price outlook, with both now indicating oil prices closer to the $50-mark.

The political uncertainty in Greece with Prime Minister Antonis Samaras' surprising move to bring forward the presidential election, and China tightening its short-term lending rules also impacted Canadian stocks.

All sectors of the S&P/TSX Composite Index were in the red with the exception of information technology that barely ended in positive territory. The steep fall was led mainly by the heavily-weighted energy sector, pressured by sliding oil prices that fell 4.5 percent today. Resource stocks, financial, industrials, and healthcare stocks also compounded the miserable performance.

The benchmark S&P/TSX Composite Index closed Wednesday at 13,852.95, down 342.78 points or 2.41 percent. The index scaled a intraday high of 14,167.27 and a low of 13,779.54.

On Tuesday, the index rebounded to end higher after having dropped 2.3 percent a day before, as commodity prices rallied to pull up energy and gold stocks from their depths.

The Energy Index dived 5.47 percent, with U.S. crude oil futures for January delivery plunging $2.88 or 4.5 percent to close at $60.94 a barrel on the Nymex Wednesday.

The Energy Information Administration, in its weekly report, said U.S. crude oil inventories increased by 1.5 million barrels in the week ended December 5, while analysts expected a decline of 2.5 million barrels. The report showed U.S. crude oil inventories at 380.8 million barrels, end last week.

Gasoline stocks jumped by 8.2 million barrels last week, while analysts anticipated a gain of 2.6 million barrels. Inventories of distillate, including heating fuel, increased 5.6 million barrels last week.

Among energy stocks, Canadian Oil Sands Limited (COS.TO) plunged 7.23 percent, Canadian Natural Resources Limited (CNQ.TO) dived 5.92 percent, Pacific Rubiales Energy Corp. (PRE.TO) fell 8.64 percent, Suncor Energy Inc. (SU.TO) dropped 4.73 percent, and Cenovus Energy Inc. (CVE.TO) dived 6.39 percent.

Imperial Oil Limited (IMO.TO) slipped 2.08percent, Crescent Point Energy Corp. (CPG.TO) plunged 9.78 percent, and Encana Corp. (ECA.TO) shed 4.38 percent.

Talisman Energy Inc. (TLM.TO) plummeted 9.15 percent, while Enbridge Inc. (ENB.TO) dipped 2.60 percent.

Gold futures ended lower with continued focus on the political developments in Greece and China tightening rules of short-term loans

The Global Gold Index fell 2.42 percent, with gold for February delivery shedding $2.60 or 0.2 percent to settle at $1,229.40 an ounce on the New York Mercantile Exchange Wednesday.

In the gold space, Barrick Gold Corp. (ABX.TO) fell 0.65 percent, Agnico Eagle Mines Limited (AEM.TO) dropped 2.73 percent, Goldcorp Inc. (G.TO) fell 2.11 percent, and Franco-Nevada Corp. (FNV.TO) gave up 1.42 percent.

Yamana Gold Inc. (YRI.TO) shed 2.44 percent, even as the miner indicated the creation of new company comprising smaller mines in Brazil.

The Capped Materials Index fell 1.80 percent, mostly on gold stocks, even as Potash Corp. of Saskatchewan Inc. (POT.TO) gained 1.79 percent.

The heavyweight Financial Index plunged 1.75 percent, with Bank of Nova Scotia (BNS.TO) shedding 1.94 percent, National Bank of Canada (NA.TO) dived 2.71 percent, and Toronto-Dominion Bank (TD.TO) dipped 0.55 percent. Royal Bank of Canada (RY.TO) fell 1.61 percent, and Bank of Montreal (BMO.TO) shed 2.07 percent.

Canadian Imperial Bank of Commerce (CM.TO) shed 1.48 percent, with the bank weighing a bid for Frank Russell Co.'s asset-management arm, Bloomberg reports.

The Healthcare Index fell 1.67 percent, as Valeant Pharmaceuticals International, Inc. (VRX.TO) shed 1.78 percent and Catamaran Corp. (CCT.TO) dipped 2.67 percent.

The Diversified Metals & Mining Index dived 3.41 percent, as First Quantum Minerals Ltd. (FM.TO) fell 3.47 percent, Teck Resources Limited (TCK.B.TO) tanked 5.68 percent, Lundin Mining Corp. (LUN.TO) dived 5.01 percent, and Sherritt International Corp. (S.TO) dropped 3.90 percent.

The Capped Industrials Index dropped 2.76 percent, as Bombardier Inc. (BBD.B.TO) dropped 1.98 percent, Canadian National Railway Company (CNR.TO) dived 4.13 percent, and SNC-Lavalin Group Inc. (SNC.TO) fell 1.73 percent.

Air Canada (AC.TO) jumped 4.78 percent, while WestJet Airlines Ltd. (WJA) gathered 1.54 percent.

The Information Technology Index gathered 0.02 percent with BlackBerry Ltd. (BB.TO) shed 3.01 percent, Descartes Systems Group Inc. (DSG.TO) down 0.75 percent and Avigilon Corp. (AVO.TO) down 1.06 percent.

The Capped Telecommunication Index fell 1.66 percent, as BCE Inc. (BCE.TO) slipped 1.3 percent, Rogers Communications Inc. (RCI.B.TO) shed 1.63 percent, and TELUS Corp. (T.TO) dropped 2.39 percent.

In corporate news, Tim Hortons Inc. (THI.TO) gained 2.39 percent after its shareholders voted to approve a takeover by Burger King.

Immunovaccine Inc. (IMV.V) announced that DPX-Survivac, the firm's lead cancer vaccine candidate, has been granted Fast Track designation by the FDA.

In economic news, inflation in China dropped to 1.4 percent in November, a five-year low, from 1.6 percent in October, the National Bureau of Statistics said Wednesday. It was forecast to remain unchanged at 1.6 percent.

Producer prices declined 2.7 percent in November from last year, which was faster than a 2.2 percent fall seen in October and the 2.4 percent drop forecast by economists.

Elsewhere in Asia, consumer confidence in Japan dropped unexpectedly in November, data from the Cabinet Office showed Wednesday. The consumer confidence index dropped to 37.7 in November from 38.9 in the previous month. Economists had forecast the index to rise to 39.5.

From Europe, the U.K. visible trade deficit narrowed to a seven-month low in October, due mainly to a fall in fuel imports, the Office for National Statistics said Wednesday. The visible trade gap fell to GBP 9.6 billion, the lowest since March, from GBP 10.5 billion in September. It was expected to decrease to GBP 9.5 billion.

Meanwhile, the British Chambers of Commerce downgraded the growth outlook for the U.K. citing slower than expected growth in services, household consumption and exports. The business lobby lowered its 2014 growth forecast to 3 percent from 3.2 percent and the forecast for 2015 was downgraded to 2.6 percent from 2.8 percent.