Canadian stocks flat following modest GDP data

Canada's main stock market closed slightly down on Tuesday as gross domestic product (GDP) increased slightly to meet market expectations.

The Toronto Stock Exchange's benchmark Standard & Poor's/TSX Composite Index trimmed 8.95 points, or 0.06 percent, to close the session at 14,778.32 points. Seven of the ten sub-sectors in the index ended the day in the negative.

Statistics Canada reported August increased 0.2 percent, and revised July's figure from 0.5 to 0.4 percent. August marks the third straight month of increases, with June showing an increase of 0.6 percent.

Most of the August increases came from goods-producing category, which rose 0.7 percent, compared to services-producing industries which did not see any gains. Leading the way was utilities (2.4 percent), mining (1.4 percent), and construction (0.5 percent).

Brian DePratto, economist of TD Bank, believes that the combined 1.2-percent increase in the past three months is an anomaly and the modest increase in August is more representative of the rates going forward.

"The August data thus provide a preview of sorts of what is likely in store once we get past this artificial boost: a modest pace of activity consistent with only gradual absorption of economic slack," DePratto wrote in a report.

He also expects the central bank to stand pat on the interest rate in the near future.

"We expect no action from the Bank of Canada in the foreseeable future, and today's GDP report reinforces this view. It will likely take a string of negative (or positive) surprises to stir any policy interest rate move from the Bank."

The TSX health care group soared 6.12 percent on the day as Valeant Pharmaceuticals shares jumped 30.24 percent to 31.18 CAD (23.29 U.S. dollars) after reports of the Laval-based company selling its stomach-drug company to a Japanese company for 10 billion U.S. dollars.

This news comes a day after a Bloomberg report said the firm's former CEO and CFO were being under investigation for potential accounting fraud, causing shares to dip 12.02 percent.

With spot price of gold rising 14.90 U.S. dollars to 1,288.00 an ounce, materials sub-sector, which features miners of gold and other metals, saw a 1.54-percent increase on the day.

Heavyweights Barrick Gold and Yamana Gold Inc. saw shares rise 4.49 percent and 0.42 percent.

Energy sub-sector was up 0.35 percent despite Brent crude oil falling 47cents to 48.14 U.S. dollars a barrel for January delivery.

Among the sub-sectors in the negative on the day, Consumer Discretionary dropped the most, falling 1.04 percent.

Meanwhile, TSX Industrials group fell 0.85 percent despite Westjet Airlines Ltd. shares rising 4.33 percent after Canada's second-largest airline posted favorable quarterly profits.

Price of copper reached a one-month high to close at 2.2229 U.S. dollars a pound after better than expected Chinese manufacturing data.

The Canadian dollar gained 0.0016 to 0.7469 U.S. dollars, compared to Monday's closing rate of 0.7453. Endit