CANADA STOCKS-TSX slips as energy companies hurt by crude fall

Tue Sep 18, 2012 4:50pm EDT
 
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* TSX closes down 24.15 points, or 0.19 pct, at 12,422.71
    * Crude slip punishes energy companies
    * Gold miners stay positive as bullion keeps moving higher

    By Alastair Sharp
    TORONTO, Sept 18 (Reuters) - Canada's main stock index
slipped on Tuesday as a retreat in crude oil prices weighed on
energy companies and some of the optimism created by the U.S.
Federal Reserve's aggressive policy action last week started to
fade.
    Three of the four heaviest weights were energy companies.
Other commodity-based stocks also felt the pressure as copper
paused and traders sold to lock in some of the recent gains in a
range of natural resources and the companies that produce them.
    The Toronto Stock Exchange's S&P/TSX composite index
 closed down 24.15 points, or 0.19 percent, at
12,422.71. 
    "The market today is responding to some of the overbought
conditions from oil, gold, and some oversold reversal from the
dollar index," said Sid Mokhtari, a market technician at CIBC
World Markets.
    The greenback hit a seven-month low against a basket of
currencies last week, while resource prices broadly jumped and
lifted the Toronto index to a five-month high after the Fed said
it would buy $40 billion a month of mortgage-backed securities
in a bid to boost economic growth.
    Crude gave back some of that gain on Tuesday, pushing Suncor
Energy down 1.4 percent to C$33.53, while Penn West
Petroleum Ltd ended down 4.5 percent at C$15.25.
Canadian Natural Resources was off 1.2 percent at
C$32.75 and Cenovus Energy fell 1.3 percent to C$34.91.
    
    GOLD REMAINS BUOYANT
    Gold, however, remained buoyant. The precious metal is
typically viewed as a hedge against inflation, which some
investors worry could be sparked by the Fed's latest move.
 
    "Gold is up because generally everything they're doing
around the globe is gold-friendly," Mokhtari said, referring to
central bank action in both Europe and the United States.
    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 Julie Brough, a vice president with Morgan Meighen
& Associates.
    "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?"
    Financial stocks also weighed, with insurers Sun Life
Financial Inc and Manulife Financial Corp down
2.4 percent and 1.6 percent respectively.
    Shares in BlackBerry maker Research In Motion rose
2.4 percent after it signed a patent licensing deal with
Microsoft Corp to use one of the software company's
file storage systems.