CANADA STOCKS-TSX ends flat as surging banks offset by falling resources

Wed Aug 29, 2012 5:12pm EDT
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* TSX closes down 0.11 of a point at 12,009.79
    * Banks keep rising in earnings week
    * Global uncertainty hurts miners, energy companies

    By Alastair Sharp
    TORONTO, Aug 29 (Reuters) - Canada's main stock index closed
flat on Wednesday as a drop in resource stocks on fears about
the global economic outlook offset another day of gains by
country's biggest banks following strong earnings on Tuesday.
    Banks and insurers accounted for six of the top ten gainers
on the index. Investors digested news of higher profits and
dividend increases from two banks on Tuesday and bet on more
pleasant surprises as the rest of the cohort report.
    Royal Bank of Canada, Toronto Dominion Bank 
and Canadian Imperial Bank of Commerce all report
earnings on Thursday.
    Bank of Nova Scotia shares ended 1.3 percent higher
at C$53.60, the single biggest positive influence on the index.
After the bell, the lender announced it would acquire ING
Groep's Canadian online bank for C$3.1 billion.
    Analysts said recent acquisition activity in the Canadian
market also lent support.
    "The economy is growing slowly like many other developed
markets, but if you're a believer in the long-term story, the
Canadian market is quite attractive," said Craig Fehr, Canadian
market strategist at Edward Jones in St. Louis, Missouri.
    Progress Energy Resources Corp shareholders
approved an almost C$6 billion bid from Malaysia's state oil
company Petronas. The shares had already jumped to near that
price tag after Petronas made the offer. 
    Ottawa said it is formally reviewing another Asian takeover
deal for a Canadian resource company, the $15.1 billion bid for
oil firm Nexen Inc from Chinese state-owned oil company
CNOOC Ltd. Nexen shares edged higher. 
    The country's largest life insurer, Manulife Financial Corp
 gained 2.2 percent after it said it had acquired
financial planning firm Wellington West Financial Services from
National Bank of Canada, which itself rose 1.7 percent.
    But resource-related stocks, which are much more susceptible
to the shifting tides of the global economy and its
corresponding appetite for materials, were broadly lower.
    The Toronto Stock Exchange's S&P/TSX composite index
 closed down 0.11 of a point at 12,009.79.
    Suncor Energy Inc was the heaviest weight while the
world's biggest gold producer Barrick Gold Corp also
dragged the index down, with each slipping 1.1 percent.
    Gold, oil and copper prices all dropped as investors waited
for signs from Federal Reserve Chairman Ben Bernanke that the
U.S. central bank would ease policy. He is due to speak at a
meeting in Jackson Hole, Wyoming, on Friday. 
    Recent data has shown the U.S. economy growing gradually,
clouding the prospect of strong language from Bernanke
supporting more monetary easing at the meeting of global central
bankers later this week. 
    Meanwhile, European leaders continue to wrangle over the
best way to contain the region's debt crisis.
    "We have to see more than just verbal action out of Europe.
Portfolio managers are coming back from vacation and they're
getting nervous," said Pat McHugh, Canadian equity strategist at
Manulife Asset Management.
    Industrial Alliance Insurance and Financial Services Inc
 jumped 4.9 percent to C$26.67 after BMO Capital Markets
raised it to the equivalent of a "buy" rating from a "hold". The
company this month sold its U.S. fixed annuities business in a
move seen improving its capital levels. 
    Pipeline operator Enbridge Inc gained 1.5 percent
to C$39.28, clawing back some recent losses after Hurricane
Isaac proved less damaging to oil installations than initially