CANADA STOCKS-Fed, emerging-market worries drag TSX lower

Wed Jan 29, 2014 11:08am EST
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* TSX falls 73.16 points, or 0.53 percent, to 13,614.50
    * Seven of the 10 main index sectors decline
    * Scotiabank the biggest negative influence on index
    * CP Rail climbs after reporting results

    By John Tilak
    TORONTO, Jan 29 (Reuters) - Canada's main stock index
dropped on Wednesday, led by declines in financial and energy
shares, as market sentiment was hit by concerns about the U.S.
Federal Reserve's monetary stimulus program and worries about
emerging-market economies.
    The Fed is set to announce later in the day whether it will 
scale back its bond-buying program as the world's biggest
economy starts to look healthier. 
    It is expected to taper its stimulus even though its
decision may be overshadowed by slowing economic growth and
increasing credit risk in China and perceptions of instability
in emerging markets. Doubts about China, coupled with extreme
volatility in the Argentine peso and the Turkish lira, have
raised questions about the risks involved with investing in
emerging markets.
    The Toronto Stock Exchange's benchmark index, with its high
concentration of resource shares, has lost about 2.7 percent in
the last week.
    "The bigger issue for us is the emerging market chaos. It's
knocking the stuffing out of positive sentiment," said Bill
Harris, portfolio manager at Avenue Investment Management.
"Stocks are going to come off because the market is nervous." 
    "The Fed is still trying to play its hand from information
from a year ago, and now the world is changing dramatically," he
    Harris sees market weakness as an opportunity to pounce on
cheaper Canadian commodity stocks.
    The benchmark S&P/TSX composite index was down
73.16 points, or 0.53 percent, at 13,614.50. Seven of the 10
main sectors on the index were in the red.
    Financials, the index's most heavily weighted sector, fell
0.8 percent. 
    Bank of Nova Scotia dropped 1.3 percent to C$61.09
and had the biggest negative influence on the market. The lender
has a significant exposure to emerging markets, with operations
in Latin America and Asia.
    Royal Bank of Canada said it will sell its Jamaican
banking operations to Sagicor Group Jamaica Ltd. RBC
shares slipped 1 percent to C$68.84. 
    Shares of energy companies gave back 1.1 percent, weighed by
lower oil prices. Suncor Energy Inc shed 1.6 percent to
C$36.12, and Canadian Natural Resources Ltd slipped 1.5
percent to C$35.74.
    Gold-mining shares jumped 1.7 percent, reflecting gains in
the price of bullion. Barrick Gold Corp climbed 3.1
percent to C$21.61.
    In other corporate news, Canadian Pacific Railway 
 reported a weaker-than-expected quarterly profit, but it
forecast adjusted earnings would climb at least 30 percent in
2014 on stronger revenue. The stock advanced 3 percent to