TSX slips in muted trade ahead of U.S. election
By Claire Sibonney
TORONTO (Reuters) - Shares ended down on Monday as the powerhouse financial, energy and materials sectors all drifted lower, but losses were muted as traders limited their bets due to the uncertain outcome of Tuesday's U.S. presidential election.
Both candidates, President Barack Obama and Republican challenger Mitt Romney, were zipping across swing states on their final day of campaigning. Polls show the election will be neck and neck.
"The election will certainly lead to fiscal and foreign policy initiatives which are likely to shape the U.S. going forward, and the world," said Rick Meslin, head of Canadian equities at UBS Securities.
The general view on Wall Street - which often sets the tone for the TSX - is that if Obama wins a second term in the White House, both U.S. economic growth and interest rates will stay low, which would favor owning bonds over stocks.
On the other hand, if Romney becomes the 47th U.S. President, investors reckon his policies will boost corporate profits and lift U.S. stock markets to new highs.
Among the heaviest decliners, Suncor Energy (SU.TO: Quote) dropped 0.6 percent at C$34.44, Royal Bank of Canada (RY.TO: Quote) lost 0.4 percent C$57.35, and Bank of Nova Scotia (BNS.TO: Quote) was down 0.4 percent to C$54.44.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended down 27.63 points, or 0.2 percent, at 12,352.78. At one point the index hit 12,347.14, its lowest level in nearly one week. Seven of the 10 sectors were weaker.
Philip Petursson, a managing director at Manulife Asset Management's portfolio advisory group, said there could be a relief rally for both U.S. and Canadian markets no matter who the winner is as some uncertainty about economic policy will be removed. Continued...