CANADA STOCKS-TSX lower as miners temper Progress, Nexen retreat

Mon Oct 22, 2012 11:04am EDT
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* TSX down 13.29 points, or 0.11 percent, at 12,402.36
    * Six of the index's 10 main groups lower
    * Progress falls 11.5 percent to C$19.16
    * Nexen down 6 percent to C$23.65

    By Solarina Ho
    TORONTO, Oct 22 (Reuters) - Canada's main stock dropped on
Monday, as Canada's rejection of a foreign bid for Progress
Energy Resources Corp rippled through the energy stocks
and tempered gains in mining stock.
    Oil and gas shares, which make up about 25 percent of the
index, dominated the decliners after the government blocked
Malaysian state oil firm Petronas' C$5.17 billion bid for
Progress. Progress, which was also hit by a number of price
target cuts after the decision, tumbled 11.5 percent to C$19.16.
    "It means the government meddling and restriction of free
markets. It's just not positive in general for the markets,"
said Levente Mady, vice president and senior portfolio manager
at PI Financial Corp.
    The rejection of the Progress Energy deal has implications
not just for the energy sector, but for the broader market as
well, he added. 
    The surprise move blocking the Progress Energy deal could
signal problems for the much larger C$15.1 billion Chinese offer
for oil producer Nexen Inc, which was the most
influential decliner on the index. Nexen slumped 6 percent to
    "The Nexen deal is a different cup of tea. But if I were one
of the Nexen shareholders, I'd be a bit more nervous this
morning than I was last week," Mady said.
    Encana Corp gave back 2.99 percent to C$23.07,
while Talisman Energy dropped 2.15 percent to C$12.76.
    At mid morning, the Toronto Stock Exchange's S&P/TSX
composite index was off 13.29 points, or 0.11 percent,
at 12,402.36. Six of the index's 10 main groups retreated.
    "It's a continuous struggle between specific individual
disappointments like the Progress deal being blocked and the
underlying economic outlooks for couple of the largest economies
of the world that appear to be improving," said Gavin Graham,
president of Graham investment strategy, referring to China and
the United States.
    Gold miners tracked pricier bullion, which rebounded
following its biggest one-day drop in more than three months on
Friday. The precious metal miners pushed the overall materials
group up 1.14 percent, with Barrick Gold leading the
index higher, rising 1.40 percent to C$39.09. Goldcorp 
gained 0.79 percent to C$43.39. 
    Agrium Inc shares were the second most influential
gainer, rising 2.32 percent, to $106.36 after the Canadian
fertilizer maker and agricultural goods retailer said on Monday
its board plans to double its annual dividend payout.