CANADA STOCKS-TSX slips as commodities under pressure

Tue Oct 12, 2010 10:51am EDT
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 *TSX down 10.34 points at 12,525.25
 *Five of 10 sectors weaker, financials up
 (Updates with details, commentary)
 By Claire Sibonney
 TORONTO, Oct 12 (Reuters) - Toronto's main stock index
edged lower on Tuesday morning as a rebound in the U.S. dollar
helped push down commodity prices, undermining the lift the
index got from stronger financial shares.
 The index's powerhouse energy sector lost 0.4 percent after
oil prices slipped for a second day. Suncor Energy (SU.TO: Quote) fell
0.5 percent to C$34.87, and Canadian Natural Resources (CNQ.TO: Quote)
lost 1.2 percent to C$37.50. [O/R]
 "Generally the commodities have been doing fairly well
through last week," said Aaron Fennell, senior market
strategist and portfolio manager at commodity futures brokerage
Lind-Waldock, a division of MF Global.
 "We've got crude oil up over $80 and really I don't think
that that is a sustainable price and I think a lot of other
traders out there think that the commodity prices are not
 The greenback strengthened broadly against a basket of
currencies on Tuesday after recent bullish momentum ahead of
minutes from the U.S. Federal Reserve's meeting that could
provide fresh insight into the central bank's thinking on
further monetary easing. [FRX/]
 Also pressuring stocks and commodities, an official Chinese
newspaper confirmed the nation's central bank increased its
required reserve ratio for six banks. [ID:nTOE69A05I]
 Gold and base-metal prices were softer, pushing the index's
materials sector down 0.2 percent. Goldcorp Inc (G.TO: Quote) was off
1.2 percent at C$44.01, and Teck Resources TCKb.TO dropped 2
percent to C$44.11. [GOL/] [MET/L]
 "Gold is obviously very popular right now but even gold is
likely in a precarious position at $1,350 (an ounce)," Fennell
said. "Stock traders are not looking at what prices are today,
they're looking at what prices will be a month from now, or two
months from now."
 He said copper also seemed overpriced, especially given
that North America is not seeing a substantial economic
 "Even if they're talking about quantitative easing, that
can be bearish for commodities if (the Fed) ends up doing less
quantitative easing than what the market originally thought,"
Fennell said.
 At 10:27 a.m. (1427 GMT), the Toronto Stock Exchange's
S&P/TSX composite index .GSPTSE was down 10.34 points, or 0.1
percent, at 12,525.25. Five of its 10 main groups were weaker.
Financial stocks were up 0.2 percent.
 Research In Motion RIM.TO fell almost 1 percent to
C$49.50 after the Economic Times reported the BlackBerry maker
was given a new deadline of Jan. 31 by the Indian government
for a final solution to get access to all its services.
 Potash Corp (POT.TO: Quote) rose 1.1 percent to C$149.18 after the
Economic Times reported that China's Sinochem has approached
Indian state-run miner NMDC Ltd for a joint bid to buy the
world's largest fertilizer maker. [ID:nSGE69A035]
 Meanwhile Ontario Teachers' Pension Plan is plotting a bid
to spoil BHP Billiton's $39 billion hostile offer for Potash,
according to Britain's Sunday Times. [ID:nSGE69903N]
 ($1=$1.01 Canadian)
 (Editing by Peter Galloway)