October 28, 2013 / 12:46 PM / 4 years ago

TSX index hits two-year high before closing lower

An electronic board displays the midday TSX index in Toronto February 16, 2011. REUTERS/Mark Blinch

TORONTO (Reuters) - Canada’s main stock index closed lower on Monday after briefly reaching a two-year high, weighed down by several heavyweight energy and mining stocks as well as a retreat by the country’s two main railways.

Offsetting those declines, the country’s largest banks turned in another positive performance. Financial stocks have jumped in recent weeks as investors grew more confident that the U.S. Federal Reserve will stick with its monetary stimulus for longer.

“If you have an optimistic outlook for the North American economy, they (Canadian banks) are still attractively priced,” said Barry Schwartz, a portfolio manager at Baskin Financial Services.

“We’re in a slow growth but steady-as-she-goes economy and there will be pockets of fantastic strength and areas of weakness,” he said, suggesting resource stocks could still struggle.

Some of the country’s heavyweight mining and energy stocks slipped on the day, with Canadian Natural Resources (CNQ.TO) off 1.9 percent at C$32.69 and Suncor Energy Inc (SU.TO) down 0.5 percent at C$37.46. Energy stocks have risen some 13 percent from a trough in June.

The two main railways both slipped, with Canadian National Railway Co (CNR.TO) down 1 percent at C$114.03 and Canadian Pacific Railway Ltd (CP.TO) off 1.3 percent at C$148.17. The pair are still sharply higher than before they posted solid earnings results last week.

Canadian National said on Monday it is still talking with the union representing about 3,300 conductors and other workers and expects the two sides will be able to avoid a strike.

Valeant Pharmaceuticals International Inc (VRX.TO) slipped 1.9 percent to C$115.34 after it agreed to pay $142.5 million in a settlement with Anacor Pharmaceuticals.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed down 27.58 points, or 0.21 percent, at 13,371.84.

It is still, however, at levels last seen in July 2011, having added 5 percent so far this month.

“We’ve had a heck of a move already this month in North American markets, particularly in Canada,” said Irwin Michael, a portfolio manager at ABC Funds. “There doesn’t appear to be a lot of fear right now. It’s complacency.”

Materials stocks were mixed, with Teck Resources TCKb.TO down 2 percent at C$29.76 and Goldcorp Inc (G.TO) up 1.2 percent to C$28.31.

Potash Corp (POT.TO) gained 1 percent to C$32.93 after rival fertilizer producer Mosaic Co (MOS.N) said it would buy the phosphate business of CF Industries Holding Inc (CF.N) for $1.2 billion.

Meanwhile, banks provided much of the positive impact, with Bank of Nova Scotia (BNS.TO) adding 0.8 percent to C$62.87 and Royal Bank of Canada (RY.TO) up 0.2 percent at C$69.61.

ABC’s Irwin said that the index could yet trade higher by the end of the year, but that a shock between now and then was also possible.

“I do think the market will end the year higher than where it is today, but from now until then I suspect we are due for a correction and I think it will be quite healthy for the marketplace,” he said.

Editing by Nick Zieminski

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below