CANADA STOCKS-TSX dips on fresh Fed fears, heads for weekly drop

Fri Aug 9, 2013 11:37am EDT
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* TSX falls 25.85 points, or 0.21 percent, to 12,527.07.
    * Eight of 10 main sector indexes decline
    * RBC drop is market's biggest negative influence
    * BlackBerry shares soar on report that company may go

    By John Tilak
    TORONTO, Aug 9 (Reuters) - Canada's main stock index slipped
on Friday, putting it on track for a third straight weekly drop
as concerns about potential monetary policy tightening by the
U.S. Federal Reserve offset positive economic signals from
    Data showed that Chinese factory output growth in July was
the strongest since the start of the year, indicating that the
world's second-largest economy may be stabilizing.
    Shares of BlackBerry Ltd jumped more than 7 percent
after several sources told Reuters that the smartphone maker is
looking at the possibility of going private. 
    But the market pendulum swung back once again to the Fed's
plans for its massive stimulus program.
    Investors have been anxious about when the U.S. central bank
might be taking its foot off the gas pedal, and recent signs
have been pointing to an imminent easing of bond buying.
    "The markets are taking a breather right now," said Sadiq
Adatia, chief investment officer of Sun Life Global Investments.
"There's a bit of a negative tone as we head into September,
given the fact that the Fed is going to be making some
    He expects the stimulus pullback to begin next month and
have a negative impact on the markets. 
    The Toronto Stock Exchange's S&P/TSX composite index
 declined 25.85 points, or 0.21 percent, to 12,527.07.
    Hit by volatile commodity prices, the resource-sensitive
Canadian market is barely positive for the year, offering a
strong contrast to record-setting gains in U.S. stocks.
    Adatia, who expects the TSX to drop 3 percent to 5 percent
this year, sees significant negativity clouding the Canadian
stock market between now and the rest of the year.
    "Housing prices will come off more, people will reduce
spending, you'll see more pressure on unemployment, and you
already have pressure on commodity prices," he said.
    Eight of the 10 main sectors in the TSX were in the red on
    Financials, the index's most heavily weighted sector, were
down 0.4 percent. 
    The stock of Royal Bank of Canada, the country's
biggest lender, dropped 0.8 percent to C$63.58. It had the
biggest negative influence on the TSX. Shares of Toronto
Dominion Bank slipped 0.5 percent to C$86.68.
    An index tracking the shares of energy producers declined
0.4 percent. Canadian Natural Resources Ltd slid 1.3
percent to C$31.38. Suncor Energy Inc dropped 0.3
percent to C$33.01.
    The industrials group was the biggest decliner among the
major sectors, falling almost 1 percent. Canadian National
Railway Co tumbled 1.8 percent to C$100.83.
    But BlackBerry's surge to an intraday high of C$10.24 helped
push the information technology sector index up more than 1
percent. BlackBerry shares gave up some of those gains, but were
still up 4.6 percent at $9.95 in late morning trading.