Energy companies with a combination of healthy balance sheets, prowess in the futures market and reputations for making acquisitions pay off will head into 2015 with the wherewithal to pick up some assets at attractive prices.
Energy stocks were a major weight on the Toronto stock market Monday morning as oil prices retreated ahead of a key meeting by the OPEC cartel later this week.
The S&P/TSX composite index declined 30.69 points to 15,080.44 after six, straight days of advances.
The Canadian dollar fell 0.19 of a cent to 88.79 cents (U.S.).
New York indexes were higher as the Dow Jones industrials were up 19.62 points to 17,829.68, the Nasdaq rose 26.66 points to 4,739.63 and the S&P 500 index advanced 5.12 points to 2,068.62.
The TSX energy sector fell almost two per cent with the January crude contract in New York down 58 cents to $75.93 (U.S.) ahead of the meeting of the OPEC cartel on Thursday. The major question on markets is whether OPEC will respond to sharply lower prices by cutting production in order to stabilize prices.
Prices have tumbled about 30 per cent from mid-summer amid rising supplies, lower demand and a strengthening greenback that has pressured all commodities priced in U.S. dollars.
Aside from energy and mining stocks, the mood was fairly positive thanks in part to a surprise interest rate cut by China's central bank on Friday, its first such move in more than two years. The move was seen as a sign of increasing official concern after economic growth tumbled to a five-year low of 7.3 per cent in the latest quarter.
Also on Friday, the head of the European Central Bank said the ECB is willing to "step up the pressure" and broaden its efforts to stimulate the struggling eurozone economy.
Confidence about the eurozone also improved Monday after a closely-watched survey showed German business confidence rose in November after six consecutive months of declines.
The Ifo institute said that its confidence index rose to 104.7 points in November from 103.2 points in October. Business leaders' assessments of their current situation and their expectations for the next six months both rose.
Elsewhere on the TSX, the base metals sector shed one per cent while December copper was unchanged at $3.01 a pound.
The gold sector fell 0.25 per cent as December gold lost $1 to $1,196.70 an ounce.
Advancers were led by a 0.75 per cent rise in the industrials group and a 0.6 per cent in consumer discretionary stocks.
On the corporate front, Toronto-based conglomerate Onex Corp. is buying Swiss food packaging company SIG Combibloc Group AG for as much as $4.66-billion (Canadian). Onex will pay $4.44-billion at the close of the transaction for SIG, and will then pay an additional amount of up to $217-million if the company meets financial targets in 2015 and 2016. Onex shares gained $1.65 to $65.81.
Hudson's Bay Company is taking out a $1.25-billion (U.S.), 20-year mortgage for the ground floor of its Saks Fifth Avenue flagship store in New York City. The mortgage has an expected interest rate of less than 4.4 per cent and is expected to save the company at least $5-million in annualized cash interest expenses. The transaction will incur approximately $76-million of one-time expenses. HBC says the iconic building at 611 Fifth Avenue is valued at approximately $3.7-billion. Its shares ran ahead $1.78 or 8.8 per cent to $21.98 (Canadian).