Roundup: Canadian stocks end lower, Canadian dollar sliding further

Canada's main stock market in Toronto pared early gains to close lower Wednesday as the Canadian dollar is expected to slip below all-time low.

The Toronto Stock Exchange's benchmark Standard & Poor's/TSX Composite Index lost 203.49 points, or 1.64 percent, to close at 12,170.41 points. All of the index's eight main sectors ended in negative territory.

The TSX index rose in early trade after positive Chinese trade data helped support oil prices. It followed a higher close on Tuesday, breaking a nine-session slump that had taken the index to its lowest since July 2013.

Chinese exports on a year-on-year basis rose 2.3 percent in December, rebounding from a decline of 7.3 percent in November, which global markets view as an encouraging signal.

"China's exports ended 2015 on a resilient note with a surprise return to growth. The outlook for 2016 is also positive, reflecting hopes for slightly stronger global demand and a weaker yuan boosting competitiveness," Tom Orlik, chief Asia economist with Bloomberg, said in a note sent to Xinhua.

"China continued to expand global market share and the share of domestic value added in exports in 2015 -- both reassuring signs," Orlik wrote, adding "the higher share of domestic value added suggests China's manufacturing sector is moving up the value chain."

In TSX early trading, Shaw Communications Inc. rallied more than 8 percent to 25.36 Canadian dollars a share. The company said it would sell Calgary-based Shaw Media unit to Toronto-based Corus Entertainment for 2.65 billion Canadian dollars (1.86 billion U.S. dollars).

Magna International Inc. added 4.6 percent to 52.85 Canadian dollars a share after the company said it expected sales in its auto parts manufacturing business to rise about 15.7 percent this year, helped by acquisitions.

On the currency front, a forecaster at an investment bank who correctly called a 69 U.S. cent loonie now expects the Canadian dollar to sink as low as 59 cents this year.

David Doyle of Macquarie Capital Markets Canada Ltd. lowered his Canadian dollar forecast to 59 U.S. cents on Tuesday. That would eclipse the all-time low for the loonie, set on Jan. 21, 2002, at 61.79 U.S. cents.

The Canadian dollar has been whipsawed of late by oil and the U.S. dollar. Oil prices can't find a bottom, with a barrel of the North America crude oil benchmark dipping below 30 U.S. dollars a barrel for the first time in 13 years on Tuesday. That's dragging the loonie down with it, as Canada's dollar is widely considered to be a play on oil prices.

In the past, a cheap dollar was a mixed blessing for the Canadian economy: a boon for exporters, but bad news for importers and Canadians who need to travel or spend money outside the country.

"What does it mean for the economy? Consumers benefit, a tad, from the drop in energy prices, but are no doubt hurt by the dollar's slide. And, the blaring headlines about a sub-70 cent dollar are likely to (hit) confidence further," said Bank of Montreal economist Doug Porter.

The Bank of Canada is set to reveal its latest interest rate decision next week, and David Doyle is among a strong minority of analysts who expect a cut to 0.25 percent.

David Madani, from Capital Economics, also expects the Bank of Canada to cut its key rate by a quarter of a percentage point next week. In a Wednesday commentary, he said new data suggests that the Canadian economy contracted in the final quarter of last year.

In a visit to Toronto Wednesday, Canada's Prime Minister Justin Trudeau said the federal government will invest more in infrastructure but no details are announced.

The Canadian dollar closed at 0.6971 U.S. dollar, compared with Tuesday's closing rate of 0.7013 U.S. dollar. Enditem