CANADA STOCKS-TSX at five-week low on Fed fears; National Bank up

Wed Dec 4, 2013 11:12am EST
 
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* TSX falls 21.57 points, or 0.16 percent, to 13,298.30
    * Eight of 10 main index sectors decline
    * National Bank climbs after results

    By John Tilak
    TORONTO, Dec 4 (Reuters) - Canada's main stock index slipped
on Wednesday, hitting a five-week low, as improving economic
data from the United States stirred worries that the U.S.
Federal Reserve might soon begin rolling back its monetary
stimulus program.
    Offsetting some of the weakness was a 1 percent gain in
shares of National Bank of Canada, after the lender
announced a 2-for-1 stock split and raised its dividend after
reporting a 4 percent fall in fourth-quarter profit.
 
    Investors also eyed the Bank of Canada as it held its key
interest rate steady but noted that the risks of undesirably
weak inflation appeared greater than they did six weeks ago.
 
    Much of the focus remained on U.S. economic data, which has
been increasingly upbeat. Reports showed U.S. private employers
topped expectations in adding jobs in November and, separately,
sales of new U.S. single-family homes recorded their biggest
increase in nearly 33-1/2 years in October. 
    "Investors should anticipate that the Fed is going to be
relatively cautious about tapering," said Gavin Graham, chief
strategy officer at Integris Pension Management Corp. "I don't
think investors should be too concerned."
    The Toronto Stock Exchange's S&P/TSX composite index
 was down 21.57 points, or 0.16 percent, at 13,298.30,
after touching 13,257.86, its lowest since Oct. 24.
    Graham said the Canadian benchmark - up about 7 percent this
year - could record solid growth next year as sentiment for
natural resource sectors improves.
    "It's fair to expect that we might seem some strength in the
materials stocks and maybe a bit of a rebound in gold," said
Graham, who expects the TSX to end 2014 at 14,500.
    Eight of the 10 main sectors on the index were in the red.
    Financials, the index's most heavily weighted sector, lost
0.4 percent. Royal Bank of Canada, the country's biggest
lender, gave back 0.7 percent to C$69.09, and Toronto Dominion
Bank declined 0.4 percent to C$95.74.
    But the materials group, which includes mining shares, was
up 0.7 percent. Goldcorp Inc gained 1 percent to C$22.48,
and Potash Corp climbed 0.5 percent to C$34.
    In other corporate news, Turquoise Hill Resources Ltd
 dropped 25 percent as shares began trading ex-rights.
Shareholders are entitled to buy one share of Turquoise Hill at
a discount for each share owned as of Dec. 6, but trades entered
on Wednesday will not clear until after that record date.