MARKET ANALYSIS: TSX Snaps 3-day Winning Streak, Ends Marginally Down

OTTAWA (Alliance News) - After opening slightly lower and swinging between gains and losses ...

Alliance News 8 November, 2018 | 10:07PM
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OTTAWA (Alliance News) - After opening slightly lower and swinging between gains and losses around the unchanged line, the Canadian stock market slipped deeper into the red and eventually ended on a negative note on Thursday, snapping a three-day winning streak.

Profit taking after recent gains, falling crude oil prices and uncertainty about the outlook for near term global economic growth weighed on the market. Choppy movements on Wall Street and largely subdued European stocks too contributed to the weakness in the market.

The US Federal Reserve today left its policy rate unchanged as expected. The bank's statement hinted at a hike in December and further gradual increases next year.

Losses in energy and healthcare shares dragged the market down. Shares from the industrials space too were weak. Consumer discretionary and telecommunications shares moved up. Bank stocks posted modest gains, while financial, materials, information technology and consumer staples stocks ended on a mixed note.

The benchmark S&P/TSX Composite Index ended down 11.96 points, or 0.08%, at 15,357.47, after scaling a low of 15,293.29 and a high of 15,393.05 intraday.

On Wednesday, the index ended higher by 76.72 points, or o.5% at 15,369.43, extending gains to a third successive day.

The Capped Energy Index declined by 1.66%. Suncor Energy Inc. (SU.TO) ended lower by 2.6%, Vermilion Energy Inc. (VET.TO) eased by 3.3%, ARC Resources (ARX.TO) declined by 4.1% and PrairieSky Royalty (PSK.TO) ended 1.4% down.

The Capped Healthcare Index ended 3.58% down. Canopy Growth Corporation (WEED.TO) shed about 7.6%, Aurora Cannabis Inc. (ACB.TO) declined more than 6%, Aphria Inc. (APHA.TO) closed lower by 4.5% and Cronos Group Inc. (CRON.TO) ended nearly 9% down.

Nuvo Pharmaceuticals Inc. (NRI.TO) shares lost more than 4.5% after the company reported net loss of USD2.4 million for the three months ended September 30, 2018 compared to a net loss of USD0.2 million for the three months ended September 30, 2017.

Knight Therapeutics Inc. (GUD.TO) and Bausch Health Companies Inc. (BHC.TO) both ended stronger by over 1%.

In the industrials space, Bombardier Inc. (BBD_B.TO) ended with a loss of 24.5%. The company announced that its third-quarter net income was USD149 million or USD0.04 per share, compared to a loss of USD100 million or USD0.04 per share in the same quarter last year. Bombardier also announced the sale of a number of non-core assets. It will reduce about 5,000 positions across the organization over the next 12 to 18 months. The stock ended with a hefty loss of 24.5%.

Air Canada (AC.TO) ended lower by about 1.4%, while CAE Inc. (CAE.TO) and Ritchie Brothers. Auctioneers (RBA.TO) gained 1.5% and 1%, respectively.

Among bank stocks, Royal Bank of Canada (RY.TO), Bank of Nova Scotia (BNS.TO), Canadian Imperial Bank of Commerce (CM.TO) and National Bank of Canada (NA.TO) gained 0.5 to 0.8%, while Toronto -Dominion Bank (TD.TO) and Bank of Montreal (BMO.TO) ended marginally higher.

Among the stocks from the materials space, Barrick Gold Corporation (ABX.TO) gained 1.7%, Goldcorp Inc. (G.TO) added nearly 1% and Wheaton Precious Metals Corp. (WPM.TO) advanced by about 0.5%, while Teck Resources (TECK.B.TO) and Methanex Corporation (MX.TO) both shed about 2.5%.

In the consumer discretionary section, Magna International Inc. (MG.TO) shares gained 5.5% despite the company lowering its full year earnings guidance. The company now expects full-year adjusted net income attributable to company in a range of USD2.3 billion to USD2.4 billion, on total sales between USD40.3 billion and USD41.4 billion, as against its earlier projection of adjusted net income in the range of USD2.4 billion to USD2.6 billion on net sales between USD40.3 billion and USD42.5 billion.

Canadian Tire Corporation Limited (CTC.TO) rose nearly 11% after the company announced an increase of USD0.55 or 15.3% in the annual dividend from USD3.60 to USD4.15 per share on each Class A non-voting and common share. The company said its consolidated adjusted normalized EBITDA increased by 14.8% in the third quarter.

Gildan Activewear Inc. (GIL.TO) and The Stars Group Inc. (TSGI.TO) also ended notably higher, while BRP Inc. (DOO.TO) and Linamar Corporation (LNR.TO) declined sharply.

US stocks ended mixed after a choppy session. As expected, the US Federal Reserve decided to leave interest rates unchanged at 2 to 2.25%, following a two-day meeting that ended today, citing realized and expected labor market conditions and inflation.

The central bank reiterated that it expects further gradual increase in interest rates will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near its 2% objective over the medium term.

The Fed's statement was largely unchanged, noting the labor market has continued to strengthen and economic activity has been rising at a strong rate since the previous month.

Meanwhile, the Labor Department's report showed a slight drop in initial jobless claims in the week ended November 3rd. The report said initial jobless claims edged down to 214,000, a decrease of 1,000 from the previous week's revised level of 215,000. Economists had expected jobless claims to dip to 213,000 from the 214,000 originally reported for the previous week.

European stocks also had a mixed outing, while Asian markets ended mostly higher, tracking Wall Street's gains on Wednesday.

In commodities, crude oil futures for December ended down USD1.00, or 1.6%, at USD60.67 a barrel, the lowest settlement price in about eight months.

Gold futures for December ended down USD3.60, or 0.3%, at USD1,225.10 an ounce.

Silver futures for December ended down USD0.146, at USD14.423 an ounce, while Copper futures settled at USD2.7360 per pound, losing USD0.0185 in the session.

Copyright RTT News/dpa-AFX

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