CANADA STOCKS-TSX rises on materials, focus on US "fiscal cliff"

Mon Dec 31, 2012 11:18am EST
 
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* TSX up 24.67 points, or 0.20 percent, at 12,340.79
    * Materials sector leads index up amid U.S. budget
uncertainty
    * Canpotex deal boosts potash companies

    By Allison Martell
    TORONTO, Dec 31 (Reuters) - Canada's main stock index rose
on Monday, boosted by the materials sector as U.S. lawmakers
pushed for a last-minute deal to avoid the "fiscal cliff". 
    Some $600 billion in tax hikes and spending cuts that could
push the U.S. economy into recession are set to start coming
into effect at midnight.  
    "Nobody really knows what's going to happen with the fiscal
cliff," said David Baskin, president of Baskin Financial
Services. "I'm seeing very light trading activity, so you could
see some outside moves today simply because there isn't much
volume going on."
    At 10:55 a.m. (1555 GMT), the Toronto Stock Exchange's
S&P/TSX composite index was up 24.67 points, or 0.20
percent, at 12,340.79. The index was on track to end the year up
about 3 percent. 
    "If you're a Canadian and you bought the index you got
killed by the commodities this year," said Baskin. "You got
whacked by the gold stocks."
    Gold miners underperformed in 2012 as soaring operating and
development costs cut into profits despite historically high
gold prices.
    Gold miners rose on Monday, however, as the price of the
precious metal edged higher. Goldcorp Inc was one of the
most influential gainers in the index, rising 1.3 percent to
C$35.92. 
    Teck Resources Ltd, Canada's largest diversified
miner, also pulled the index higher as upbeat Chinese
manufacturing data boosted iron ore and copper prices. The stock
was up 2.1 percent at C$35.81.  
    The heavyweight materials sector rose 1.1 percent overall.
Financial stocks, which have been rising and falling with the
perceived chances of a U.S. budget deal in recent weeks, were
down 0.21 percent in volatile trading.
    Canpotex Ltd, the offshore sales agency for Potash Corp of
Saskatchewan, Mosaic Co and Agrium Inc 
said it struck a six-month agreement to supply a subsidiary of
China's Sinofert Holdings Ltd. Potash Corp rose 0.9
percent to C$40.06, and Agrium was up 0.8 percent at C$98.58.
 
    The Canadian Imperial Bank of Commerce said it would
pay $149.5 million to the estate of Lehman Brothers Holdings Inc
to resolve litigation over a collateralized debt obligation tied
to the bankruptcy of the former Wall Street bank. Shares fell
1.0 percent to C$79.75, and CIBC was the most influential
negative stock in the index.