TSX index hits two-year high before closing lower

Mon Oct 28, 2013 5:00pm EDT
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By Alastair Sharp

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: Quote) off 1.9 percent at C$32.69 and Suncor Energy Inc (SU.TO: Quote) 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: Quote) down 1 percent at C$114.03 and Canadian Pacific Railway Ltd (CP.TO: Quote) 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: Quote) slipped 1.9 percent to C$115.34 after it agreed to pay $142.5 million in a settlement with Anacor Pharmaceuticals.   Continued...

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