3 Min Read
* Energy sector slumps 1.5 pct
* Nexen falls 18 pct as takeover speculation wanes
* Materials sag 1.9 pct as gold, base metals fall
* RIM up 2.2 pct despite profit warning (Adds quote, details)
By Jennifer Kwan
TORONTO, Dec 3 (Reuters) - The Toronto Stock Exchange's main index was lower, but off its lows, at midday on Wednesday as weaker metals prices hit miners and as Nexen Inc NXY.TO fell steeply as takeover speculation waned.
The energy sector was down 1.5 percent even though oil prices edged above $47 a barrel after U.S. weekly data showed a surprise decline in crude inventories. Nexen, which has been at the center of speculation that it would be taken over by Total SA (TOTF.PA), was the most heavily traded stock on the market, sliding 18 percent to C$19.60.
According to a Times of London report, Total has dropped the idea of a bid for Canada's No. 4 independent oil explorer. [ID:nWEA7872]
"The major individual story of the day is Nexen. There had been some pretty persistent rumors that the France-based Total would make an offer for Nexen," said Peter Chandler, senior vice-president at Canaccord Capital in Waterloo, Ontario.
Shortly after 11:30 a.m. (1630 GMT), the S&P/TSX composite index .GSPTSE was down 17.09 points, or 0.21 percent, at 8,310.72, with seven of its 10 main groups lower.
The financial services group, which makes up about a third of the key index, was up 1.3 percent. Manulife Financial Corp (MFC.TO) rose 0.6 percent to C$20.00, while Bank of Nova Scotia (BNS.TO) climbed 2.5 percent to C$33.24.
A rebound in the sector after a fall on Tuesday could be due to financials stocks being oversold, said Fred Ketchen, director of equity trading at ScotiaMcLeod.
"There's not a whole lot here that's going to tell me any good reason why except markets will always go too high, they'll always go too low," said Ketchen. "It's the kind of volatility we've come to expect within this market at the present time."
Earlier, BlackBerry maker Research In Motion RIM.TO helped tilt the index lower after cutting its third-quarter profit and revenue forecasts. [ID:nL3134327]
But the volatile stock rebounded and was up 2.2 percent at C$47.48. One analyst said the market had expected the lowered outlook.
RIM also said on Wednesday it plans to make a takeover offer for Certicom Corp (CIC.TO) at C$1.50 a share. [ID:nN03317482]
The resource-laden materials group sank 1.9 percent as gold and base metal prices retreated. Barrick Gold (ABX.TO) fell 2.1 percent to C$33.93.
"The perception now is that the reality is we're in a recession ... and therefore some demand destruction for a lot of these raw resources," Chandler said. "They're just extending their losses after having a fairly strong snapback rally."
"The one thing you're going to see continue here is extreme volatility."
$1=$1.26 Canadian Reporting by Jennifer Kwan; editing by Peter Galloway