CANADA STOCKS-TSX recovers from 1-week low on U.S. budget hope
* TSX falls 27.22 points, or 0.22 percent, to 12,084.41 * Eight of 10 sectors decline By John Tilak TORONTO, Nov 28 (Reuters) - Canadian stocks pared most of their early losses on Wednesday after comments from a top Republican fueled hopes for a U.S. budget deal that would avert a "fiscal cliff" of tax hikes and spending cuts that threatens to drag the United States back into recession. Toronto's main stock index hit a one-week low in early dealings, led down by mining and energy stocks, as fresh doubts over the resolution of the U.S. fiscal crisis hurt investor sentiment and pulled commodity prices lower. Democrats and Republicans have been locked in a stalemate over how to solve the crisis, and Senate Majority Leader Harry Reid on Tuesday expressed disappointment that there was "little progress." Investors were also skeptical about the impact of a deal reached earlier this week to reduce Greece's debt. But the market perked up a bit after U.S. House of Representative Speaker John Boehner on Wednesday said Republicans were willing to put revenues on the table to get a U.S. fiscal deal if Democrats agreed to spending cuts. "The market is fixated on the perception of which way the talks on the fiscal cliff are going. That's the single biggest driver," said Elvis Picardo, strategist and vice president of research at Global Securities. "The underlying tone of the market is positive. There is hope that some resolution will be achieved. Barring any macroeconomic shocks, we're looking for a positive close for the end of the year," he said of the outlook for the TSX. At midafternoon, the Toronto Stock Exchange's S&P/TSX composite index was down 27.22 points, or 0.22 percent, at 12,084.41. Earlier in the session, the index hit 12,004.49, its lowest point since Nov. 20. TSX is up about 1.1 percent since the start of the year. "Investors are looking for a statement of how the United States really plans to resolve this problem. So far there doesn't seem to be a plan," said Fred Ketchen, director of equity trading at ScotiaMcLeod. Material and energy stocks, which make up more than half the index's weight, fell 0.5 percent and 0.6 percent, respectively. Eight of the index's 10 main sectors were lower. Gold miners dropped as gold prices fell 1.5 percent. Goldcorp Inc was down 0.3 percent at C$38.85, and Eldorado Gold fell 1.8 percent to C$14.63. Silver Wheaton Corp fell 1.1 percent to C$35.98, tracking a 1.4 percent decline in silver prices. < XAG=> Oil producer Suncor Energy Inc, down 1.6 percent at C$32.36, was the biggest drag on the index. Oil prices hit a 12-day low on Wednesday. In other news, Canadian Tire Corp Ltd agreed to buy closely held hockey chain Pro Hockey Life Sporting Goods Inc for C$85 million. Its shares were down 0.4 percent at C$66.73. SNC-Lavalin Group lost 1.6 percent to C$39.86 after the Quebec-based engineering and construction company's former chief executive was arrested on three fraud-related charges, adding to a series of allegations about the company's ethics. The financial sector, the biggest on the index, was little changed. Royal Bank of Canada, which will kick off the quarterly bank earnings season start on Thursday, was up 0.2 percent at C$58.16. "The bank earnings should be a big mover for the TSX. If they come in pretty strong, that could be just the catalyst that the TSX needed to get going," Picardo said.
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