TSX's six-day rally ends despite railway gains

Wed Oct 23, 2013 5:15pm EDT
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By Alastair Sharp

TORONTO (Reuters) - Canada's main stock index slipped on Wednesday, ending a six-session rally, as strong results from the country's two big railways failed to offset heavy losses in banking, energy and mining stocks.

"It's a bipolar market today. It's difficult for the index to get any traction when the three biggest groups are down," said Elvis Picardo, portfolio manager at Global Securities in Vancouver.

The financial, energy and materials groups combined account for more than 70 percent of the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE, which ended down 4.74 points, or 0.04 percent, at 13,243.32.

Strong gains for the railways limited the index's loss. Canadian Pacific Railway Ltd (CP.TO: Quote), the country's No. 2 rail operator, surged 10.2 percent to C$148.53 after reporting a 45 percent jump in profit as freight revenue rose and operating costs fell.

Canadian National Railway Co (CNR.TO: Quote), the No. 1 operator and focus of scrutiny after one of its trains derailed and caught fire last weekend, jumped 4.4 percent to C$114.59. Late on Tuesday, it reported a market-beating third-quarter profit and record revenue as well as announcing a two-for-one stock split and share buyback plan.

The railways should prosper as the economy grows but the potential for growing opposition to their carriage of oil is a concern, said Rick Hutcheon, president and chief operating officer at RKH Investments.

"A great deal of the current growth in their earnings is coming from oil-by-rail," he said.

Mining had the heaviest losses as the price of gold slipped after hitting four-week highs a day earlier. Copper prices also fell. <GOL/> <MET/L>   Continued...

People walk past an electronic board displaying the midday TSX index in Toronto in this February 16, 2011 file photo. REUTERS/Mark Blinch/Files