Canadian stocks ended sharply lower on Tuesday, tracking declining global equity markets and after earnings from Bank of Nova Scotia fell short of expectations, with broad declines across all major sectors except energy.
All major indices ended in the red, except the energy as oil prices rose on geopolitical tensions in Libya and with Israeli Prime Minister rhetoric calling for a full dismantle of Iranian nuclear facilities without any concessions to Tehran.
Almost all major global equity markets in the U.S. and Europe ended lower, due mainly on profit taking with investors preferring to cash in on recent gains.
Markets in Europe ended in negative territory, despite the stronger than expected German retail sales report. Meanwhile, eurozone producer prices declined the most since November 2009 on falling energy prices.
Markets in the United States were under pressure and ended deep in the red. The gains posted on Monday lifted the Dow and the S&P 500 to new record closing highs, while the Nasdaq closed above 5,000 for the first time since early 2000. The lack of any major U.S. economic data has kept some traders on the sidelines. Investors, meanwhile, await the release of the U.S. jobs report for February on Friday.
The benchmark S&P/TSX Composite Index closed Tuesday at 15,133.85, down 130.20 points or 0.85 percent. The index scaled an intraday high of 15,258.04 and a low of 15,109.88.
On Monday, the index closed up 29.71 points or 0.20 percent, at 15,264.05. The index scaled an intraday high of 15,283.72 and a low of 15,212.26.
The heavyweight Financial Index dropped 1.14 percent, with Bank of Nova Scotia (BNS.TO) shedding 1.72 percent after its first quarter earnings fell short of analysts expectation. The bank reported first quarter adjusted EPS of C$1.36, compared to C$1.34 a year ago. Analysts expected earnings of C$1.38 per share for the quarter.
Among other major banks, Bank of Montreal (BMO.TO) fell 1.22 percent, Royal Bank of Canada (RY.TO) dropped 1.51 percent. National Bank of Canada (NA.TO) lost 1.24 percent, and Canadian Imperial Bank of Commerce (CM.TO) surrendered 0.87 percent.
Toronto-Dominion Bank (TD.TO) dropped 0.77 percent.
Crude oil ended sharply higher amid concerns over the violence in Libya as rival groups targeted oil terminals fueling concerns of possible supply disruption from the region. Prices were also impacted by Israeli Prime Minister Benjamin Netanyahu's rhetoric before the U.S. Congress on the ongoing nuclear talks with Iran.
The Energy Index gained 1.05 percent with U.S. crude oil futures for April delivery, jumping $0.93 or 1.9 percent to settle at $50.52 a barrel on the New York Mercantile Exchange Tuesday.
Among energy stocks, Canadian Oil Sands Limited (COS.TO) jumped 4.07 percent, and Penn West Petroleum Ltd. (PWT.TO) added 0.42 percent.
Suncor Energy Inc. (SU.TO) rose 1.29 percent, Canadian Natural Resources Limited (CNQ.TO) inched up 0.11 percent, Crescent Point Energy Corp. (CPG.TO) gained 0.63 percent, and Encana Corp. (ECA.TO) slipped 1.76 percent.
Bonterra Energy (BNE.TO) moved up 0.46 percent after declaring a February dividend of $0.15 per share.
Cenovus Energy Inc. (CVE.TO) advanced 1.96 percent, after closing a $1.5 billion bought-deal common share financing.
Pacific Rubiales Energy Corp. (PRE.TO) gained 0.81 percent, after announcing that its fourth quarter total net production is expected to be in the range of 143 to 149 Mboe/d, an increase of approximately 9 percent from last year.
Savanna Energy Services Corp. (SVY.TO) jumped 5.64 percent, after mutually agreeing with an Australian customer to cancel construction of 4 TDS drilling rigs.
Gold futures ended lower as investors moved away from the safe haven appeal of the precious metal yesterday following a four-day gain and with some strong German retail sales report on Tuesday signaling the European economy may be on the mend.
The Gold Index dropped 2.04 percent, with gold for April delivery dropping $3.80 or 0.3 percent to settle at $1,204.40 an ounce on the New York Mercantile Exchange Tuesday.
Among gold stocks, Goldcorp (G.TO) fell 1.92 percent, Yamana Gold Inc. (YRI.TO) dropped 0.77 percent, Barrick Gold Corp. (ABX.TO) shed 2.50 percent, and Kinross Gold Corp (K.TO) fell 1.71 percent. IAMGOLD (IMG.TO) surrendered 2.68 percent, while Eldorado Gold (ELD.TO) diving 3.57 percent.
The Capped Materials Index fell 2.16 percent on declining gold stocks, with Potash Corp. of Saskatchewan Inc. (POT.TO) down 1.51 percent and Agrium Inc. (AGU.TO) dropping 1.83 percent.
The Diversified Metals & Mining Index dropped 2.50 percent, as First Quantum Minerals Ltd. (FM.TO) shed 1.84 percent, Lundin Mining Corp. (LUN.TO) dropped 4.07 percent, and Teck Resources (TCK-B.TO) slipped 2.11 percent.
Sherritt International Corp. (S.TO) dived 5.16 percent, HudBay Minerals (HBM.TO) surrendered 3.93 percent, and Finning International Inc. (FTT.TO) surrendered 2.62 percent.
The Health Care Index slipped 0.33 percent, as Valeant Pharmaceuticals International, Inc. (VRX.TO) fell 1.02 percent, Extendicare Inc. (EXE.TO) gathered 1.83 percent, and Catamaran Corp. (CCT.TO) dropped 1.57 percent.
The Capped Industrials Index dropped 1.10 percent, with Bombardier Inc. (BBD.B.TO) shedding 0.82 percent, Air Canada (AC.TO) gaining 1.14 percent, Canadian Pacific Railway Limited (CP.TO) dropping 0.99 percent, and Canadian National Railway Company (CNR.TO) surrendering 1.23 percent.
The Information Technology Index surrendered 1.93 percent, with BlackBerry Limited (BB.TO) shedding 1.30 percent after it introduced the new all-touch BlackBerry Leap smartphone for 4G LTE networks.
Among other tech stocks, Sierra Wireless, Inc. (SW.TO) dropped 4.43 percent, Constellation Software Inc. (CSU.TO) shed 2.77 percent, and Descartes Systems Group Inc. (DSG.TO) fell 2.39 percent.
The Capped Telecommunication Index shed 0.57 percent, with BCE down 0.37 percent, TELUS Corp. (T.TO) added 0.30 percent, Manitoba Telecom Services Inc. (MBT.TO) dropped 1.32 percent, and Rogers Communications Inc. (RCI.B.TO) fell 1.00 percent.
Enghouse Systems (ESL.TO) rose 1.05 percent, after agreeing to acquire CDRator A/S for approximately $23.0 million.
Oncolytics Biotech (ONC.TO) soared 7.46 percent after the FDA granted Orphan Drug Designation for REOLYSIN, in the treatment of primary peritoneal cancers.
EnerCare (ECI.TO) gained 2.12 percent after reporting a fourth quarter profit of C$5.7 million, up from C$4.8 million last year. The company also increased its monthly dividend to $0.07 per share.
On the economic front, data from Statistics Canada showed that Canadian economy grew 2.4 percent in the fourth quarter on a quarterly basis, beating expectations for a 2.0 percent rise. This is down from the revised 3.2 percent growth recorded in the third quarter.
On year, the GDP rose 2.8 percent in the fourth quarter, up from the expected 2.5 percent rise, following 2.0 percent increase in the preceding quarter.
Separate data from the same agency showed that Canada's industrial product price index declined 0.4 percent in January, largely as a result of lower prices for energy and petroleum products. The pace of decline was less than the expected 0.8 percent fall. The index tumbled 1.5 percent in December.
In other economic news, eurozone producer prices declined the most since November 2009 on falling energy prices, Eurostat reported Tuesday. Producer prices fell 3.4 percent on a yearly basis in January, following a 2.6 percent drop in December. This was the biggest fall since November 2009, when prices fell 4.4 percent. Economists had forecast a decline of 3 percent.
Germany's retail sales growth accelerated unexpectedly in January to log its fastest gain in four-and-a-half years, boosting hopes of consumer spending cushioning economic growth. Retail sales annual growth improved for the second straight month in January, to 5.3 percent from 4.8 percent in December, data from Destatis showed Tuesday. Economists had forecast only 3.0 percent growth for January.
The U.K. construction sector expanded strongly in February as new orders logged the steepest rise since October 2014, data from Markit showed Tuesday. The Chartered Institute of Procurement & Supply/Markit construction Purchasing Managers' Index rose to 60.1 in February from 59.1 in January. It was forecast to fall to 59. The score was above the neutral 50 threshold for the twenty-second straight month.
Consumer price inflation in the developed economies eased for the third straight month in January to its lowest level in more than five years, dragged down by further decline in energy prices, the Organization for Economic Cooperation and Development, or OECD, revealed Tuesday.
The consumer price index for the OECD area rose 0.5 percent year-on-year at the start of the year, following a 1.1 increase in December, the Paris-based think tank said. Inflation was the lowest since October 2009, when prices rose only 0.2 percent.
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