TSX Ends Sharply Lower On Draghi Comments -- Canadian Commentary

(RTTNews) - Canadian stocks plunged to end sharply lower on Thursday, tracking declining global equity markets, after the European Central Bank failed to announce any additional stimulus measures this year while leaving key interest rates unchanged.

All major sub-indices of the main index ended in the red, weighed down by some disappointing quarterly earnings from Toronto-Dominion Bank with heavy selling in financial and resource stocks as commodity prices dived.

European Central Bank President Mario Draghi on Thursday said policymakers will reassess the impact of the stimulus measures already taken early next year, but reiterated that the bank stands ready to take further action if required to avert deflation.

Draghi said the ECB discussed additional stimulus measures, even as officials considered the buying of all kinds of assets excluding gold. He also called for an evaluation of the impact of the recent plunge in oil prices.

Investors largely ignored some upbeat data from the U.S. with initial jobless claims for unemployment benefits dropping last week, after reporting an unexpected increase in claims in the week before.

The benchmark S&P/TSX Composite Index closed Thursday at 14,469.95 , down 284.11 points or 1.93 percent. The index scaled a intraday high of 14,789.02 and a low of 14,433.59.

On Wednesday, the index higher as crude oil and bullion prices rose, followed by some strong buying in energy and mining sectors, even as Bank of Canada left its benchmark interest rate unchanged.

Crude oil ended lower after Saudi Arabia trimmed its oil prices for the U.S. and Asia, notwithstanding the more than expected decline in U.S. stockpiles yesterday.

The Energy Index plunged 4.96 percent, with U.S. crude oil futures for January delivery dropping $0.57 or 0.8 percent to close at $66.81 a barrel on the Nymex Thursday.

Among energy stocks, Canadian Oil Sands Limited (COS.TO) plunged 16.37 percent, Talisman Energy Inc. (TLM.TO) plummeted 12.36 percent, Pacific Rubiales Energy Corp. (PRE.TO) plunged 17.84 percent, and Penn West Petroleum Ltd. (PWT.TO) dived 12.60 percent.

Suncor Energy Inc. (SU.TO) fell 3.93 percent, Crescent Point Energy Corp. (CPG.TO) dived 6.81 percent, Cenovus Energy Inc. (CVE.TO) dipped 3.99 percent, Bankers Petroleum Ltd. (BNK.TO) dropped 4.97 percent, and Athabasca Oil Corp. (ATH.TO) plunged 6.98 percent. Encana Corp. (ECA:TSX) shed 3.30 percent and Canadian Natural Resources Limited (CNQ.TO) fell 4.44 percent.

Enbridge Inc. (ENB.TO) surged 10.27 percent after announcing that it expects 2015 adjusted earnings between C$2.05 and C$2.35 per share. The company also announced a 33 percent increase to its next quarterly common share dividend as well as a Canadian restructuring plan and corresponding new dividend payout policy range.

Gold futures ended slightly lower after some upbeat economic data from the U.S. showed initial jobless claims for unemployment benefits to have dropped more than expected last week.

The Global Gold Index shed 2.48 percent, with gold for February delivery dipping $1.00 or 0.1 percent to settle at $1,207.70 an ounce on the New York Mercantile Exchange Thursday.

In the gold space, Barrick Gold Corp. (ABX.TO) shed 3.14 percent, Agnico Eagle Mines Limited (AEM.TO) dived 3.97 percent, Goldcorp Inc. (G.TO) dropped 3.15 percent, Franco-Nevada Corp. (FNV.TO) declined 2.16 percent, and Yamana Gold Inc. (YRI.TO) surrendered 2.78 percent.

Detour Gold Corp. (DGC.TO) fell 3.23 percent, while Eldorado Gold Corp. (ELD.TO) dropped 2.53 percent. Kinross Gold Corp. (K.TO) gained 1.14 percent.

The Capped Materials Index fell 2.14 percent, mostly on declining gold stocks, with Potash Corp. of Saskatchewan Inc. (POT.TO) shedding 0.68 percent.

The Financial Index plummeted 2.24 percent, with Toronto-Dominion Bank (TD.TO) plunging 5.06 percent after reporting fourth-quarter net income of C$1.75 billion or C$0.91 a share, up from C$1.62 billion or C$0.84 a share last year.

Canadian Imperial Bank of Commerce (CM.TO) fell 3.40 percent after revealing a fourth-quarter profit of C$809 million or C$1.98 per share, compared to C$832 million or C$2.02 per share a year ago.

Among other major banks, Royal Bank of Canada (RY.TO) fell 1.32 percent, Bank of Montreal (BMO.TO) shed 0.99 percent, Bank of Nova Scotia (BNS.TO) dived 2.04 percent, and National Bank of Canada (NA.TO) lost 1.68 percent.

Manulife Financial Corporation (MFC.TO) declined 2.49 percent, while Power Corporation of Canada (POW.TO) fell 1.99 percent, and Sun Life Financial Inc. (SLF.TO) surrendered 1.30 percent.

The Healthcare Index dropped 0.68 percent, as Valeant Pharmaceuticals International, Inc. (VRX.TO) dipped 0.63 percent, Catamaran Corp. (CCT.TO) fell 0.84 percent and Extendicare Inc. (EXE.TO) slipped 0.62 percent.

The Diversified Metals & Mining Index plunged 3.09 percent, as Sherritt International Corp. (S.TO) dropped 3.09 percent after having surged 9.28 percent yesterday.

First Quantum Minerals Ltd. (FM.TO) plunged 6.35 percent, Teck Resources Limited (TCK.B.TO) fell 4.39 percent, and Lundin Mining Corp. (LUN.TO) dipped 0.74 percent.

The Capped Industrials Index dived 1.75 percent, as Bombardier Inc. (BBD.B.TO) dropped 4.83 percent, Canadian National Railway (CNR.TO) surrendered 2.35 percent, and SNC-Lavalin Group Inc. (SNC.TO) fell 0.98 percent. Air Canada (AC.TO) jumped 4.96 percent.

The Information Technology Index shed 1.65 percent with BlackBerry Ltd. (BB.TO) down 4.03 percent and Avigilon Corp. (AVO.TO) down 2.69 percent.

Technology stock Descartes Systems Group Inc. (DSG.TO) shed 2.64 percent, despite having reported third-quarter net income of $4.2 million or $0.05 a share, up from $2.2 million or $0.03 a share.

The Capped Telecommunication Index fell 1.08 percent, as Rogers Communications Inc. (RCI.B.TO) shed 0.77 percent, TELUS Corp, (T.TO) dropped 1.21 percent, and BCE Inc. (BCE.TO) fell 1.35 percent.

Dollarama Inc. (DOL.TO) inched up 0.15 percent after reporting third-quarter net earnings of $73.0 million or $0.55 per share, compared to $61.7 million or $0.43 per share a year ago.

Gildan Activewear Inc. (GIL.TO) plunged 9.20 percent, after reporting a profit of $122.7 million or $1.00 per share for the fourth quarter, compared with net earnings of $96.8 million or $0.79 per share last year.

In economic news, initial jobless claims in the U.S. dropped in the week ended November 29, pulling back from an unexpected increase in first-time claims for U.S. unemployment benefits in the previous week, a Labor Department report showed Thursday.

The initial jobless claims for unemployment benefits in the U.S. fell to 297,000, a decrease of 17,000 from the previous week's revised level of 314,000. Economists expected jobless claims to pull back to 295,000 from the 313,000 originally reported for the previous week.

Meanwhile, economic activity in the U.S. continued to expand in October and November, the Federal Reserve's Beige Book report showed Wednesday. A compilation of anecdotal evidence on economic conditions in the twelve Fed districts, the Beige Book also said a number of districts noted that contacts remained optimistic about the outlook for future economic activity.

There will not be any additional stimulus for the eurozone immediately, after European Central Bank President Mario Draghi on Thursday said policymakers will reassess the impact of the stimulus measures already taken early next year. Nevertheless, he reiterated that the bank stands ready to take further action if required to avert deflation.

The ECB also unveiled its latest staff macroeconomic projections with substantial downward revision to both growth and inflation forecasts. The growth forecast for this year was reduced to 0.8 percent from 0.9 percent seen in September. The projection for next year was cut to 1 percent from 1.6 percent. The outlook for 2016 was slashed to 1.5 percent from 1.9 percent. Both domestic demand and net exports were also revised down.

The European Central Bank left its key refinancing rate unchanged at a record low of 0.05 percent, while maintaining the deposit rate at -0.20 percent and the marginal lending rate at 0.30 percent.

Elsewhere, the Bank of England too has left interest rate steady at a record low of 0.50 percent and the size of asset purchases at GBP 375 billion at the end of the two-day rate setting meeting earlier today.

Germany's construction sector grew at the fastest rate in nine months in November, as activity rose in all three broad categories, a survey from Markit Economics showed Thursday. The purchasing managers' index for the construction sector rose to 53.5 in November from 51.5 in the previous month, the highest since February.