The Canadian stock market is up in early trade Tuesday, as it attempts to rebound from a sharp 6-session pull back. Gold stocks are the only Canadian stocks under pressure this morning. Gold prices are dropping as fears of a global stock market crash ease. Global markets are attempting to recover, after the People's Bank of China lowered interest rates for the fifth time in nine months.
China's central bank cut its key interest rates and reserve ratio in a surprise move on Tuesday, boosting efforts to support the slowing economy as the Chinese stock market fell steeply for a second straight day.
The interest rates were reduced by 0.25 percentage points each, the People's Bank of China said in a statement on its website.
The benchmark one-year lending rate was cut to 4.6 percent and the deposit rate was slashed to 1.75 percent. The new rates are effective from August 26. The ceiling on fixed deposits with tenure more than a year was also scrapped in sync with the deposit rate liberalization plan.
Markets in Europe are firmly in positive territory Tuesday. The gains are partly due to bargain-hunting following the steep losses in recent days. German business confidence also improved unexpectedly in August.
Market in the United States are also trading higher this morning. Bargain hunting is contributing to the early strength on Wall Street on the heels of the steep losses seen in recent days.
After reporting a sharp drop in U.S. new home sales in the previous month, the Commerce Department released a report on Tuesday showing a notable rebound in sales in the month of July. The report said new home sales jumped to an annual rate of 507,000 in July, 5.4 percent above the revised June rate of 481,000.
Economists had expected new home sales to climb to a rate of 516,000 from the 482,000 originally reported for the previous month.
Consumer confidence in the U.S. has seen a substantial improvement in the month of August, according to a report released by the Conference Board on Tuesday, with the consumer confidence index rebounding from the drop seen last month.
The Conference Board said its consumer confidence index jumped to 101.5 in August from 91.0 in July. The index had been expected to show a more modest increase to a reading of 94.0.
The benchmark S&P/TSX Composite Index is up 279.85 points or 2.14 percent at 13,332.59.
On Monday, the index closed down 420.93 points or 3.12 percent, at 13,052.74. The index scaled an intraday high of 13,396.76 and a low of 12,705.17.
The Energy Index is increasing by 3.70 percent. Crude oil prices rallied Tuesday following brutal losses in the previous session.
Crescent Point Energy (CPG.TO) is up 5.53 percent and Cenovus Energy (CVE.TO) is rising by 3.96 percent. Canadian Natural Resources (CNQ.TO) is higher by 3.77 percent and Encana (ECA.TO) is increasing by 8.67 percent. Pacific Exploration & Production (PRE.TO) is climbing by 6.29 percent and Canadian Oil Sands (COS.TO) is gaining 4.86 percent. Suncor Energy (SU.TO) is advancing by 2.31 percent and Enbridge (ENB.TO) is adding 2.06 percent.
The heavyweight Financial Index is climbing by 3.21 percent. Royal Bank of Canada (RY.TO) is advancing by 3.32 percent and Toronto-Dominion Bank (TD.TO) is up 3.57 percent. Bank of Nova Scotia (BNS.TO) is rising by 3.06 percent and National Bank of Canada (NA.TO) is increasing by 2.84 percent. Canadian Imperial Bank of Commerce (CM.TO) is higher by 2.35 percent.
Bank of Montreal (BMO.TO) is gaining 4.16 percent. The company reported third quarter adjusted EPS of C$1.86, which topped the consensus estimate of C$1.73. The company's board of directors also declared a 5 percent higher quarterly dividend of C$0.82 per share.
Sun Life Financial (SLF.TO) is adding 3.41 percent. The company is reportedly in talks to buy Assurant Inc.'s employee-benefits unit.
The Diversified Metal and Mining Index is rising by 2.82 percent. HudBay Minerals (HBM.TO) is gaining 3.01 percent and Capstone Mining (CS.TO) is rising by 1.56 percent. First Quantum Minerals (FM.TO) is climbing by 2 percent and Teck Resources (TCK-A.TO) is up 6.56 percent. Lundin Mining (LUN.TO) is higher by 1.55 percent and Sherritt International (S.TO) is advancing by 1.98 percent.
The Capped Health Care Index is gaining 2.61 percent. Concordia Healthcare (CXR.TO) is advancing by 2.81 percent and Extendicare (EXE.TO) is gaining 2.35 percent. Valeant Pharmaceutical International (VRX.TO) is adding 2.21 percent.
The Capped Information Technology Index is adding 1.98 percent. Sierra Wireless (SW.TO) is rising by 3.77 percent and BlackBerry (BB.TO) is up 0.54 percent. Descartes Systems Group (DSG.TO) is advancing by 2.27 percent and Avigilon (AVO.TO) is adding 2.18 percent. Constellation Software (CSU.TO) is also higher by 2.37 percent.
The Capped Industrials Index is up 1.18 percent. Canadian National Railway (CNR.TO) is gaining 1.04 percent and Finning International (FTT.TO) is higher by 3.10 percent. Air Canada (AC.TO) is increasing by 3.40 percent and Bombardier (BBD-A.TO) is surging by 8.26 percent. AutoCanada (ACQ.TO) is also rising by 1.68 percent.
The Capped Telecommunication Services Index is climbing by 0.41 percent. TELUS (T.TO) is up 0.96 percent and Manitoba Telecom Services (MBT.TO) is higher by 0.18 percent.
The Gold Index is falling by 2.90 percent. Gold prices fell Tuesday morning amid easing anxiety about a possible stock market meltdown.
Yamana Gold (YRI.TO) is lower by 10.30 percent and B2Gold (BTO.TO) is losing 4.52 percent. Kinross Gold (K.TO) is declining by 11.40 percent and Royal Gold (RGL.TO) is falling by 7.29 percent. Goldcorp (G.TO) is decreasing by 2.40 percent and IAMGOLD (IMG.TO) is weakening by 10.53 percent. Eldorado Gold (ELD.TO) is tumbling by 8.04 percent and Barrick Gold (ABX.TO) is down 4.49 percent.
The Capped Materials Index is also down 1.07 percent. Franco-Nevada (FNV.TO) is losing 5.25 percent and Agnico Eagle Mines (AEM.TO) is down 5.04 percent. Silver Wheaton (SLW.TO) is declining by 2.86 percent.
On the economic front, a leading economic index for China remained positive in July, the latest survey from the Conference Board showed on Tuesday, advancing 0.9 percent. That follows the downwardly revised 0.6 percent increase in June (originally up 1.0 percent) and the 1.1 percent jump in May.
German business confidence improved unexpectedly in August, reports said citing data from the Munich-based Ifo Institute on Tuesday. The Ifo Business Climate Index rose to 108.3 in August from 108 a month ago. It was forecast to fall to 107.6.
Germany's economic growth improved as initially estimated in the second quarter, driven by strong exports. Gross domestic product rose 0.4 percent quarter-on-quarter, faster than the 0.3 percent expansion seen in the first three months of the year, final data from Destatis showed Tuesday. The growth rate matched the preliminary estimate released on August 14.
In commodities, crude oil futures for September delivery are up $1.00 or 2.62 percent at $39.24 a barrel.
Natural gas for September is up 0.017 or 0.64 percent at $2.667 per million btu.
Gold futures for December are down $15.10 or 1.31 percent at $1,138.50 an ounce.
Silver for September is down $0.177 or 1.20 percent at $14.585 an ounce.
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