CANADA STOCKS-TSX drops as gold price hits miners; Suncor gains

Tue Apr 30, 2013 11:34am EDT
 
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* TSX falls 39.43 points, or 0.32 percent, to 12,273.24
    * Seven of 10 major index sectors decline
    * Suncor up nearly 4 percent after earnings beat
    * CGI Group jumps 15 percent after results

    By John Tilak
    TORONTO, April 30 (Reuters) - Canada's main stock index
stumbled on Tuesday as hard-hit gold producers dropped another 3
percent on lower gold prices, a fall that overwhelmed a jump in
Suncor Energy Inc shares after a strong earnings
showing.
    Suncor rose 3.8 percent as Canada's largest energy company
increased its dividend 54 percent, said it would buy back C$2
billion ($1.97 billion) of its own shares and reported
first-quarter earnings that surpassed expectations. Suncor had
the biggest positive influence on the index.  
    "It's a pleasant surprise," Irwin Michael, portfolio manager
at ABC Funds, said of Suncor's results.
    "You need more of the big companies doing a little better
than expected," he added. "We expect to see more dividend
increases and better earnings as well."
    The index's materials sector, which includes mining stocks,
lost 1 percent. In the group, miner Goldcorp Inc fell 2.6
percent to C$28.41.
    The price of gold fell as investors remained on the
sidelines ahead of central bank meetings this week in Europe and
the United States and support from the physical market softened
while major buyer China was on holiday. 
     Weak European economic data heightened expectations of an
interest rate cut by the European Central Bank. Investors also
eyed the U.S. Federal Reserve's Open Market Committee as it
begins a two-day meeting on monetary policy.
    "If there is bad news on the economy, the expectation is
that quantitative easing will stay in longer and interest rates
will stay low for longer," Michael said.
    The Toronto Stock Exchange's S&P/TSX composite index
 was down 39.43 points, or 0.32 percent, at 12,273.24.
Seven of the 10 main sectors on the index were in the red.
    Financials, the index's most heavily weighted sector, gave
back 0.5 percent.
    Information-technology services company CGI Group Inc
 jumped 15 percent to C$30.96 after it reported strong
fiscal second-quarter results.