TSX steady as positive data offsets Iraq concerns

Mon Jun 23, 2014 4:56pm EDT
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By John Tilak

TORONTO (Reuters) - Canada's main stock index was little changed on Monday as worries about political instability in Iraq were balanced by upbeat economic data from China and the United States.

U.S. Secretary of State John Kerry met Iraqi Prime Minister Nuri al-Maliki to push for more inclusive leadership as government forces abandoned the border with Jordan, leaving Iraq's entire Western frontier outside government control.

Meanwhile, data showed an expansion in Chinese factory sector activity in June for the first time in six months as new orders surged. U.S. housing and manufacturing data also painted a promising picture.

Some fund managers fear the Toronto market, which had its highest-ever close last week, might have run ahead of itself and see few catalysts that could fuel further gains. The benchmark index is up about 11 percent this year, driven largely by a strong rally in the energy sector.

"The only thing that's probably going to give wheels to the TSX is if oil wants to keep going,” said Keith Richards, portfolio manager and technical analyst at ValueTrend Wealth Management. “Those catalysts that could push oil higher are more of a bet than a probability.

“Would I be going gangbusters about the TSX over the next three months? Probably not," he added. “I think there are more opportunities on the U.S. side."

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 3.34 points, or 0.02 percent, at 15,105.63. Six of the 10 main sectors on the index were in the red.

Industrials slipped 0.4 percent, with Air Canada ACb.TO losing 7 percent to C$8.77 and Canadian National Railway Co CNR.TO giving back 0.9 percent to C$67.69.   Continued...

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