CANADA STOCKS-Financials lead TSX lower on US budget worry, RIM rallies

Thu Dec 27, 2012 11:56am EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

* TSX down 47.61 points, or 0.38 percent, at 12,322.19
    * Eight of 10 sectors lower; financials, energy weigh

    By Julie Gordon
    TORONTO, Dec 27 (Reuters) - Canada's main stock index fell
on Thursday, weighed down by financial and energy stocks as new
comments on U.S. budget talks sparked worries that a deal might
not be reached and  potentially plunge the United States into a
    U.S. Senate Majority Leader Harry Reid warned that the
country is poised to go off the so-called "fiscal cliff" if
squabbling politicians do not reach a deal. 
    The combination of tax hikes and spending cuts is slated to
start taking effect next week if no compromise is reached. 
    "The market hates uncertainty," said Paul Hand, managing
director at RBC Capital Markets. "And that's what this is.
They'd almost prefer a bad outcome than no outcome." 
    Hand noted that volume was very thin on Thursday as equity
markets reopened after a two-day holiday for Christmas and
Boxing Day. 
    At 11:21 a.m. (1621 GMT), the Toronto Stock Exchange was
down 47.61 points, or 0.38 percent, at 12,322.19. Eight of the
10 sectors were lower, with financials and energy weighing.
    The financial sector was the biggest drag, falling 0.85
percent, as economic worries put pressure on the bank-heavy
    The Royal Bank of Canada and Toronto Dominion Bank
 were the two top decliners, falling 1 percent to C$59.76
and 1.18 percent to C$83 respectively.
    The energy sector also dragged, dropping 0.54 percent as oil
and gas producer Canadian Natural Resources Ltd fell
1.32 percent to C$28.51 and pipeline company Enbridge Inc
 slid 0.45 percent to C$42.36.
    Oil prices eased on Thursday in choppy trade, pulling back
from Wednesday's gains, when Canada's equity markets were closed
for the Boxing Day holiday. 
    "Investors in commodities flip flop like a hot potato," said
Barry Schwartz, vice president and portfolio manager at Baskin
Financial Services.
    "They love to be in them when they're going up, but when
you're worried about China, when you're worried about growth,
when you're worried about modern economic impacts, then you
don't want to be in these names."
    While energy dragged, the materials sector, home to mining
companies, rose 1.04 percent, led higher by the gold miners.
    Barrick Gold Corp, the world's top gold producer,
rose 2.6 percent to C$34.38, while Goldcorp Inc climbed
1.8 percent to C$36.17. 
    Also bucking the downward trend was Research in Motion
, which climbed 9.3 percent to C$11.50, as the volatile
BlackBerry-maker recovered from a 20 percent plunge last week.