TSX gain as Nexen jumps, U.S. budget talks eyed
By Claire Sibonney
TORONTO (Reuters) - Canadian shares edged up on Friday, in thin and choppy month-end trading, as investors clung to hopes that U.S. politicians would reach a fiscal deal before the end of the year, and as Nexen Inc NXY.TO jumped on signs that a takeover of the company may be approved.
Energy producer Nexen was one of the top advancers, climbing nearly 5 percent to C$24.39. A Canadian cabinet figure known to have reservations about CNOOC Ltd's (0883.HK: Quote) bid to buy Nexen said that at least some of Canada's concerns about getting reciprocal treatment from China had been addressed by an investment pact.
Nexen shares had been under pressure this week because of a possible delay in the U.S. regulatory approval process, but the Canadian government signaled late on Thursday that the U.S. deliberations would not affect Canada's review.
Despite the positive signals for the Nexen deal, seen as a litmus test for foreign investment policy in Canada, broader moves in the market were limited as investors remained cautious over the U.S. budget impasse.
U.S. President Barack Obama and top Republicans remained at odds about how to avert going over the "fiscal cliff," a series of tax hikes and spending cuts next year that could push the economy into recession.
Obama accused a "handful of Republicans" in the U.S. House of Representatives of holding up legislation to extend tax cuts for middle-class Americans in order to try to preserve them for the wealthy.
"When you look at the fiscal cliff I think there's no other way around it. They might push it right up to the edge and maybe a little bit over and play brinkmanship, but they will come to an agreement," said Arthur Salzer, chief executive officer of Northland Wealth Management. "There's a lot of posturing.
"When you get these kinds of deleveraging cycles, tax rates do go up ... interest rates stay low and the wealthy don't get wealthy as fast anymore." Continued...