TSX steady as China deal offsets fall in resources

Mon Nov 10, 2014 4:45pm EST
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By Alastair Sharp and John Tilak

TORONTO (Reuters) - Canada's main stock index was little changed on Monday as declines in the energy and gold-mining sectors, which followed commodity prices lower, were offset by optimism over a trade deal that gives global investors access to China’s stock market.

A strong U.S. dollar fueled a decline in the prices of oil and bullion. The energy sector dropped 1.3 percent, and shares of gold miners dived 5.9 percent.

After recording four straight weekly gains, the resource-sensitive TSX hit a one-month high before giving up some of its early advances.

A long-awaited trading link between Hong Kong and Shanghai will open on Nov. 17, an important step towards opening China's capital markets that will give foreign and Chinese individual investors unprecedented access to each others' stock exchanges.

“This is a significant milestone in capital markets history. It’s a positive for Canada,” said Marcus Xu, portfolio manager at M.Y. Capital Management Corp in Vancouver.

“I’ll be buying commodity stocks at this point,” he added. Xu says the prices are attractive and the fundamentals are in place for a rebound in natural resource stocks and the broader Canadian equity market.

The Toronto Stock Exchange's S&P/TSX composite index closed up 18.97 points, or 0.13 percent, at 14,709.80. Eight of the 10 main sectors on the index were higher.

Among shares of energy producers, Canadian Natural Resources Ltd lost 0.7 percent to C$40.57 and Encana Corp shed 1.9 percent to C$21.05.   Continued...

A man walks past an old Toronto Stock Exchange (TSX) sign in Toronto, June 23, 2014.  REUTERS/Mark Blinch