TSX falls with resource prices as U.S. crisis looms
By Alastair Sharp
TORONTO (Reuters) - Canada's main stock index fell on Thursday with gold and energy shares slipping along with commodity prices as the shadow of the looming U.S. fiscal crisis darkened.
The market erased most of Wednesday's gains, which were spurred by the U.S. Federal Reserve's moves to boost the economy, and seven of the index's 10 main sectors ended in the red.
"There are a number of fundamental drivers that should push the market higher," including the Fed's plan, said Elvis Picardo, strategist at Global Securities in Vancouver.
"But that's not happening because investors are still very much fixated on the whole issue of the (U.S.) fiscal cliff and that's introducing an element of uncertainty that's unusual for December," he said.
Sharp differences remained between congressional Republicans and the White House in talks to avert the "fiscal cliff" of steep tax hikes and budget cuts that threaten recession, and negotiators warned the showdown could drag on past Christmas.
Encana Corp ECA.TO jumped 2 percent to C$20.85 after it said it will sell nearly half of an Alberta shale gas project to PetroChina Co Ltd (601857.SS: Quote) for C$2.2 billion, the first big deal since Ottawa issued new guidelines for major energy investments by foreign state-owned enterprises last week.
Picardo said some other energy stocks such as Athabasca Oil Corp (ATH.TO: Quote), which added 5.7 percent to C$10.25, rose on the Encana news as it showed that foreign state-owned investment was likely to keep flowing into the sector.
Those gains, however, where not enough to overcome the overall pessimistic sentiment on the market as U.S. politicians continued to wrestle with the budget crisis. Continued...