Canadian market dips despite favorable job data

Canada's main stock market in Toronto ended Friday lower despite better than expected December employment data, as sharp declines in mining stocks weighed in.

The Toronto Stock Exchange's benchmark Standard & Poor's/TSX Composite lost 90.53 points, or 0.58 percent, to close the week at 15,496.05 points. Eight of the ten sub-sectors lost ground on the day.

Prior to markets opening on Friday, Statistics Canada reported that the economy added 53,700 jobs in December, compared to the market expectation of a 2,500 decline. This marked the fifth consecutive month of increases, with the latest figure representing a 0.3 percent gain compared to November.

Unemployment rate ticked up 0.1 percent to 6.9 percent, as the labour force rose 0.1 percent to 29.72 million. By category, 81,300 full-time jobs were added, while 27,600 part-time jobs were lost. The spike in full-time jobs is the highest single-month increase since March 2012.

Dawn Desjardins, Deputy Chief Economist at Royal Bank of Canada believes the latest figures are encouraging ones to end a year.

"The labour market ended 2016 on a high note in terms of job creation pushing the annual increase up to the highest level since 2012," Desjardins said in a report. "December's report provides a solid handoff to 2017 and paves the way for household spending to continue."

She does anticipate the Bank of Canada making any major policy changes throughout the year.

"Combined with a recovery in energy prices and fiscal stimulus we expect growth to accelerate to an above-average pace in 2017. Nervousness about business investment and sustaining export growth will likely see the central bank stay on the sidelines through 2017 although as these sectors recover we expect the Bank will begin to tighten policy," Desjardins added.

Statistics Canada also released the international merchandise trade for November which saw a 526 million (all figures Canadian dollars) surplus, the first time exports exceeded imports since September 2014. Total exports during the month rose 4.3 percent to 45.6 billion, while imports grew 0.7 percent to 45.1 billion.

Exports to China soared 11.1 percent to 2.0 billion Canadian dollars, while imports fell 7.6 percent to 3.1 billion Canadian dollars.

During the trading day on Friday, Consumer Discretionary and Information Technology groups were the only ones to not lose ground. The former saw a 0.12 percent uptick, while the latter remained unchanged.

The Materials group, which is comprised of producers of gold, precious metals, and raw materials, plunged 2.85 percent on the day after a combined 4.24 percent gain in the three days prior. The spot price of an ounce of gold and silver contributed, falling 0.68 percent to 1,172.20 U.S. dollars and 0.66 percent to 16.44 U.S. dollars, respectively.

Shares of gold miners B2Gold Corp and Kinross Gold Corporation slipped 3.26 percent and 3.71 percent, respectively. Meanwhile, Nevada-based Tahoe Resources Inc. shares tumbled 14.04 percent to 12.73 Canadian dollars (9.62 U.S. dollars) after announcing their 2017 production costs would exceed previous estimates.

Other groups losing ground on the day were: Health Care (0.85 percent), Consumer Staples (0.74 percent), Telecommunications (0.57 percent), Energy (0.43 percent), Financials (0.24 percent), Utilities (0.22 percent), and Industrials (0.18 percent).

The TSX Energy group faded as Calgary-based Baytex Energy Corp. fell 1.21 percent to 6.52 Canadian dollars (4.93 U.S. dollars) a share. Price of Brent crude oil for March delivery ticked up 2 cents to 56.80 U.S. dollars a barrel.

The Canadian dollar inched up 0.03 cents to finish the week at 0.7556 U.S. dollars. Endite