CANADA STOCKS-TSX slips in muted trade ahead of U.S. election

Mon Nov 5, 2012 4:40pm EST
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* TSX ends down 27.63 points, or 0.2 percent, at 12,352.78
    * Market holds to narrow range day before U.S. elections
    * Valeant, Silver Wheaton, Penn West weaker after results

    By Claire Sibonney
    TORONTO, Nov 5 (Reuters) - Canadian shares ended down on
Monday as the powerhouse financial, energy and materials sectors
all drifted lower, but losses were muted as traders limited
their bets due to the uncertain outcome of Tuesday's U.S.
presidential election.
    Both candidates, President Barack Obama and Republican
challenger Mitt Romney, were zipping across swing states on
their final day of campaigning. Polls show the election will be
neck and neck. 
    "The election will certainly lead to fiscal and foreign
policy initiatives which are likely to shape the U.S. going
forward, and the world," said Rick Meslin, head of Canadian
equities at UBS Securities.
    The general view on Wall Street - which often sets the tone
for the TSX - is that if Obama wins a second term in the White
House, both U.S. economic growth and interest rates will stay
low, which would favor owning bonds over stocks. 
    On the other hand, if Romney becomes the 47th U.S.
President, investors reckon his policies will boost corporate
profits and lift U.S. stock markets to new highs. 
    Among the heaviest decliners, Suncor Energy dropped
0.6 percent at C$34.44, Royal Bank of Canada lost 0.4
percent C$57.35, and Bank of Nova Scotia was down 0.4
percent to C$54.44.
    The Toronto Stock Exchange's S&P/TSX composite index
 ended down 27.63 points, or 0.2 percent, at 12,352.78.
At one point the index hit 12,347.14, its lowest level in nearly
one week. Seven of the 10 sectors were weaker. 
    Philip Petursson, a managing director at Manulife Asset
Management's portfolio advisory group, said there could be a
relief rally for both U.S. and Canadian markets no matter who
the winner is as some uncertainty about economic policy will be
    "The markets are on hold until they see the outcome," he
    The most influential decliner on the index was Valeant
Pharmaceuticals International, down 2.1 percent to
C$55.03. Canada's biggest public drugmaker reported a drop in
quarterly net profit on Friday, hurt by costs associated with
its long string of acquisitions. 
    Penn West Petroleum Ltd sank 4.2 percent to $11.60
after several analysts cut their share-price targets on the oil
and gas producer. On Friday, the company reported a
third-quarter loss and cut its production forecast.
    Other stocks leading the market lower included Silver
Wheaton Corp, which dropped 1.4 percent to C$38.88
after it said its third-quarter profit fell 11
    On the upside, Turquoise Hill Resources Ltd, owner
of the big Oyu Tolgoi copper-gold mine in Mongolia, surged
nearly 11 percent to C$8.95. The company signed a long-awaited
power supply deal with China, putting it on track to begin
commercial production in the first half of next year.