CANADA STOCKS-TSX down slightly as nongold commodities weigh

Tue Sep 18, 2012 11:07am EDT
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* TSX down 4.16 points, or 0.03 percent, at 12,442.70
    * Financials, base metal miners push lower
    * Gold miners lead materials sector higher

    By Alastair Sharp
    TORONTO, Sept 18 (Reuters) - Canada's benchmark stock index
slipped slightly on Tuesday as declines in the prices of
commodities other than gold hurt base metal miners and energy
companies, and attention shifted from the U.S. Federal Reserve
stimulus to underlying economic troubles.
    Both crude oil and copper were down from multi-month highs
hit last week after the U.S. Federal Reserve said it would buy
$40 billion a month of mortgage-backed securities bonds, a move
known as quantitative easing, as it sought to improve the U.S.
labor market outlook.  
    Gold, however, remained buoyant as the precious metal is
typically viewed as a hedge against inflation. 
    The market is reflecting both exuberance after the Fed
stimulus and worry that a looming "fiscal cliff" - expiring tax
cuts and U.S. government spending reductions due early next year
- will derail the economy of Canada's main trading partner, 
according to Morgan Meighen & Associates Vice President Julie
    "You've got two dueling forces taking place in the market,"
she said. "We're going back and forth - OK, now we have
liquidity but are we going to have the corporate earnings if we
don't have economic growth?"
    By 10:44 a.m. (1444 GMT) the Toronto Stock Exchange's
S&P/TSX composite index was down 4.16 points, or 0.03
percent, at 12,442.70. The index hit a five-month high on
    Penn West Petroleum Ltd was one of the biggest
weights, down 2.9 percent at C$15.50, while Pacific Rubiales
Energy Corp gained 2.9 percent to C$25.11.
    The materials sector - which includes precious and base
metals miners as well as fertilizer companies - was up slightly,
with most of the gains seen in the gold components.
    Financial stocks were among the worst-performing sectors,
with insurers Sun Life Financial Inc and Manulife
Financial Corp down 1.4 percent and 0.8 percent
    National Bank Financial upgraded a string of gold and base
metal miners, saying the Fed's stimulus reduced the risk of
deflation and boosted demand for bullion.
    "As with past bullion price increases, we believe the easier
money to be made is by investing early," the bank's mining
analysts said in a note to clients.
    Their top picks included Kinross Gold Corp, AuRico
Gold Inc and Golden Star Resources Ltd.