TSX dips as CN Rail, financials offset rise in miners

Tue Jul 23, 2013 5:16pm EDT
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By John Tilak

TORONTO (Reuters) - Canada's main stock index pulled back on Tuesday after a four-day rally as a decline in shares of Canadian National Railway Co (CNR.TO: Quote) following its results offset strength in mining shares.

Shares of CN Railway, the country's largest railroad, fell 3.2 percent after the company posted an 11 percent rise in second-quarter adjusted profit but said the second half might be challenging. The stock was the single biggest factor leading the market lower. It had run up before earnings were released after the market close on Monday.

Rival Canadian Pacific Railway Ltd (CP.TO: Quote) gave back 1.8 percent to C$130.18. The decline of the two rail companies took the industrials sector down 1.1 percent.

The Toronto market hit a seven-week high earlier in the session before giving up gains.

The materials sector was the biggest positive influence, rising 1.5 percent as shares of gold and base metal miners rose.

"From a valuation perspective and also from a sentiment perspective, things are turning around" for metals and mining companies, said Marcus Xu, president and portfolio manager at MY Capital Management Corp.

"The commodities side of the market is always going to be volatile, but I think a long-term trend is starting," he added. "As the market starts to get more comfortable, you'll see more money gravitate to risky sectors and names."

Gold hit a one-month high as speculators bought back bearish bets ahead of an option expiry later this week. <GOL/>   Continued...

A Toronto Stock Exchange (TSX) logo is seen in Toronto November 9, 2007. REUTERS/Mark Blinch