CANADA STOCKS-TSX falls with miners, but Fed hopes cap losses

Wed Aug 1, 2012 12:28pm EDT
 
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* TSX down 27.07 pts, or 0.2 pct, at 11,637.64
    * Mining shares hurt by weak global data
    * Markets look to Fed, ECB for signs of stimulus

    By Jon Cook
    TORONTO, Aug 1 (Reuters) - Canada's main stock index was
lower on Wednesday near midday as mining shares slid on weak
global manufacturing data, but losses were limited by hopes of
more stimulus from central banks in the United States and Europe
ahead of key policy statements this week.
    Canada's heavily-weighted materials sector, which includes
miners, fell more than 1 percent on Wednesday as manufacturing
data -- at home and abroad -- revealed global demand weakened
last month.
    The euro zone's manufacturing sector contracted for the 11th
straight month in July, while China's official factory
purchasing managers' index fell to an eight-month low of 50.1 in
July, suggesting the sector is barely growing. 
 
    In North America, U.S. manufacturing contracted for a second
consecutive month and Canada's RBC Purchasing Managers' Index
posted its first decline in six months. 
 
    "There is concern that the world economy is slowing," said
John Hughes, senior mining analyst at Desjardins Securities.
"We've seen commodity prices tick down on the back of the
economic data that came out this morning."
    Declines were led by gold miners as bullion fell below
$1,600 an ounce on Wednesday ahead of policy statements by the
U.S. Federal Reserve and the European Central Bank. 
    Goldcorp Inc fell 3.1 percent to C$35.08, Barrick
Gold sank 1.1 percent to C$32.65 and Kinross Gold
 dropped 3 percent to C$8.13.
    Around noon EDT (1600 GMT), the Toronto Stock Exchange's
S&P/TSX composite index was down 27.07 points, or 0.2
percent, at 11,637.64.
    Energy shares, which climbed 0.3 percent, helped pare some
losses on higher oil prices after data on Wednesday showed U.S.
crude oil inventories slumped last week, far more than forecast.
    Top oil producer, Suncor Energy, led gains, rising
0.9 percent to C$30.92.
    Talisman Energy shares rose 1.6 percent to C$12.60,
despite the independent oil producer reporting a 72 percent fall
in second-quarter profit on Wednesday. Talisman has been
mentioned as a possible next target in the aftermath of CNOOC
Ltd's $15.1 billion friendly bid for Nexen Inc
. 
    Slowing growth in the United States had fired up hopes of
stimulus measures from the Fed late last week. However, chances
of this seemed lower after recent supportive data, including
higher home prices and improved consumer confidence.
 
    While expectations of concrete solutions from the Fed and
the ECB have dimmed, some optimism remained in global markets
due to ECB President Mario Draghi's statement last week that the
central bank would do whatever it takes to save the euro.
 
    "The ECB is much more important in terms of trying to find
some stability in Europe," said Hughes. "The market appears to
be taking a bet on the outcome of both those meetings and it's
willing to bet more on the downside."
    Canadian financial shares slid 0.2 percent, led by top life
insurers. Manulife Financial Corp -- Canada's largest
life insurer -- was down 1.3 percent at C$10.63.
    Intact Financial Corp tumbled 3.5 percent to
C$62.20, despite the property and casualty insurer reporting a
90 percent jump in operating profit for the second quarter on
Wednesday. 
    In other earnings news, shares of Catamaran Corp 
jumped 3 percent to C$87.76 after the pharmacy benefit manager,
formerly known as SXC Health Solutions, reported a 27 percent
rise in quarterly profit on Wednesday.