TORONTO (Reuters) - The TSX ended little changed on Monday as retreating gold issues offset energy sector gains, preventing Canadian equities from joining the global rally after Greece approved tough new austerity measures to win a critical debt bailout.
Most of the TSX’s 10 main sectors were higher, but the gains were undercut by a weak showing from the world’s largest gold miner and others in the mining space.
Despite a rise in bullion prices <GOL/>, Barrick Gold (ABX.TO) slid 0.6 percent to C$47.97, coming under pressure from plans to sell its 20 percent stake in Russia’s Highland Gold (HGM.L), pulling out of one of the world’s most promising - but also toughest - gold frontiers.
Goldcorp (G.TO), Canada’s second largest gold miner, was also down, falling 0.5 percent to C$45.70.
Base metal miners also helped pull the materials sector lower. Teck Resources TCKb.TO fell 2.3 percent to C$39.30 as copper prices slipped after encountering stiff resistance at around the $4 per pound ($8,800 per tonne) level. <MET/L>
“For Canadian investors it’s a little disappointing, because we’re seeing the rest of the world rally on a deal in Greece and we’re being left out of the party,” said Philip Petursson, portfolio advisory group at Manulife Asset Management.
World stocks rose on Monday after Greece’s parliament passed drastic austerity measures to avoid a messy debt default, but doubts over whether Athens will be able to live up to its promises and secure a new rescue package curbed an initial rally in the euro.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed up 9.27 points, or 0.07 percent, at 12,398.69, after giving up earlier gains and briefly turning negative.
Petursson said that, after an extended rally to start the year, investors might be fearing a lull and were cashing in some profits.
“It wouldn’t be surprising to see a bit of a profit-taking pullback, which would actually be healthy for the markets and bring in any money that’s been sitting on the sidelines waiting for this,” added Petursson.
Energy issues kept the TSX above water, after crude prices rose to near six-month highs, as investors saw the Greek deal helping to stabilize the euro zone economy and increase demand for commodities. <O/R>
Oil producers were led by Canadian Natural Resources (CNQ.TO), up 1.1 percent to C$38.17, and Canadian Oil Sands COS.TO, which rose 2.7 percent to C$22.59.
Financials also climbed on prospects that greater global stability would eventually bring interest rate increases, helping insurers that guaranteed annuities at higher rates before central banks slashed rates because of the recession.
“Manulife and other insurance companies would benefit more from a steeper yield curve, to have longterm interest rates come up a little bit, which appears to be the case,” said Carlos Leitao, chief economist at Laurentian Bank Securities.
Shares of Valeant Pharmaceuticals International Inc (VRX.TO) rose 0.7 percent to C$48.43 after the drug maker said it had agreed to buy closely held Eyetech Inc, as it aims to expand its presence in the ophthalmology business.
Editing by Rob Wilson