CANADA STOCKS-U.S. shutdown pulls TSX lower, but golds gain

Wed Oct 2, 2013 11:39am EDT
 
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* TSX falls 30.46, or 0.24 percent, to 12,816.98
    * Nine of 10 main index sectors decline
    * RBC has biggest negative influence on market

    By John Tilak
    TORONTO, Oct 2 (Reuters) - Canada's main stock index
stumbled on Wednesday as a partial U.S. government shutdown
shone a spotlight on the U.S. funding impasse, causing declines
in almost every single major sector.
    A day after The Democratic-led U.S. Senate voted to kill
Republicans' latest attempts to modify an emergency government
funding bill, hopes that the debt crisis would be resolved soon
began to dwindle. 
    The uncertainty spurred a jump in gold, which is seen as a
safe-haven asset, as investors placed bets on the commodity.
Gold stocks gained about 3 percent. 
    With the shutdown extending to a second day, the market
began to be worried about what impact this could have on
economic growth and monetary policy.
     "Reality appears to sinking in that the U.S. government is
shut down," said Irwin Michael, portfolio manager at ABC Funds.
"There are still a lot of risks in the marketplace and the
economy." 
    "Investors are very cautious and a little gun-shy, not
wanting to do anything until they see a lot of these issues
resolved," he said. 
    The Toronto Stock Exchange's S&P/TSX composite index
 was down 30.46 points, or 0.24 percent, at 12,816.98. 
    Michael expects the Canadian index to end the year higher as
sentiment for commodities improves.
    While the Toronto market's losses were less severe than U.S.
stocks, nine of the 10 main sectors on the index were in the
red.
    The financial group fell 0.6 percent. Royal Bank of Canada
, the country's biggest lender, dropped 0.8 percent to
C$66.21 and had the biggest negative influence on the market.
Toronto Dominion Bank gave back 0.5 percent to C$91.83.
    Energy shares shed 0.7 percent, with Suncor Energy Inc
 losing almost 1 percent to C$36.80 and Canadian Natural
Resources Ltd falling 1.3 percent to C$32.40.
    But the rise in gold stocks pushed the materials sector,
which includes mining shares, up 1.8 percent.
    Barrick Gold Corp climbed 3.5 percent to C$19.25,
and Goldcorp Inc added 2.7 percent to C$26.76.