CANADA STOCKS-TSX drops on Hong Kong protests; Encana rises on deal

Mon Sep 29, 2014 11:12am EDT
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* TSX down 73.72 points, or 0.49 percent, at 14,953.05
    * All of the 10 main index sectors decline
    * Encana jumps 3 percent after announcing takeover deal

    By John Tilak
    TORONTO, Sept 29 (Reuters) - Canada's main stock index
dropped on Monday, with every major sector lower, as anxiety
over democracy protests in Hong Kong rekindled the bearish
sentiment that swept the market last week. 
    One bright spot amid a sea of red was Encana Corp,
whose shares jumped 3 percent after the company said it agreed
to buy Fort Worth, Texas-based Athlon Energy for $5.93
billion in cash. 
    Hong Kong protesters defiantly stood their ground on Monday
in the face of tear gas and police baton charges, while the
Communist government in Beijing said it would not tolerate
dissent and warned against any foreign interference.
    The resource-heavy Canadian index's decline followed a big
drop last week when the market was hit hard by a rally in the
U.S. dollar and weakness in commodity prices. 
    Fears that recent strong signals from the U.S. economy might
prompt the Federal Reserve to raise interest rates sooner that
expected also weighed.
    "It's like 'Chicken Little'. People think that the sky is
falling," said Irwin Michael, portfolio manager at ABC Funds. "A
lot of uncertainty makes investors nervous."
    "We believe that the market will end the year higher than
where it is right now," he added. "But we're going through a
very difficult period."
    Michael said that some stocks, especially in the energy
sector, were becoming attractively valued. "It's at that point
of maximum pain where you can find great opportunities." 
    The Toronto Stock Exchange's S&P/TSX composite index
 was down 73.72 points, or 0.49 percent, at 14,953.05.
All of the 10 main sectors on the index were in the red.
    Financials, the index's most heavily weighted sector,
dropped 0.8 percent. Royal Bank of Canada lost 1.2
percent to C$79.46, and Toronto-Dominion Bank declined
0.9 percent to C$54.90.
    Shares of energy producers and shed 0.6 percent, with
Canadian Natural Resources Ltd giving back 1.3 percent
to C$43.75 and Suncor Energy Inc falling 1.2 percent to
    ($1=$1.12 Canadian)

 (Editing by Peter Galloway)