January 13, 2011 / 4:03 PM / in 7 years

CANADA STOCKS-TSX dragged down by resources, U.S. data

*TSX down 30.45 points to 13,429.76

*Six of 10 sectors weaker

*Inmet, Lundin announce $9 bln merger

(Updates with details, commentary)

By Claire Sibonney

TORONTO, Jan 13 (Reuters) - Toronto’s main stock index drifted lower Thursday as softer commodity prices and weak U.S. employment data offset news of another multibillion-dollar deal in the mining sector.

Gold and copper were both softer, dragging materials down 0.7 percent. Barrick Gold Corp (ABX.TO), down 1.4 percent at C$48.62 and Teck Resources TCKb.TO, off 1.7 percent at C$63.17, were among the heaviest decliners.

“We had a nice follow-through yesterday off a big, big day on Tuesday. Unless there’s some dramatic new story about commodity prices, that has to tucker out,” said Barry Schwartz, vice president and portfolio manager at Baskin Financial Services.

Lundin Mining (LUN.TO) dropped 3 percent to C$7.66, and Inmet Mining IMN.TO jumped 5 percent to C$78.35, after the two agreed to join forces. The two companies will create a C$9 billion copper producer, forging the latest in a series of deals involving Canadian miners. [ID:nN12239651]

“Inmet now gets to participate in that mine in Congo and Lundin shareholders of course get to participate in Inmet’s better valuation,” said Schwartz.

“Had these two companies continued separately they wouldn’t be around for very much longer, so this is a necessary merger in our opinion.”

Even so, the deal provided for no premium on either company’s share price, and that could have muted any positive sentiment for the broader market.

At 10:26 a.m. (1526 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 30.45 points, or 0.23 percent, at 13,429.76. Six of the 10 sectors were weaker, including financials, off 0.1 percent.

The energy sector retreated 0.3 percent despite Brent oil futures climbing towards $100 a barrel, with Suncor Energy Inc (SU.TO) losing 0.1 percent to C$37.64.

“We’re all getting tired of seeing commodity prices keep going higher. At the end of the day we still haven’t seen how fourth quarter (earnings) have come in, we still haven’t seen what the outlooks from the companies are about 2011.”

Also weighing on the market, U.S. jobless claims jumped to their highest since October while food and energy costs boosted producer prices, pointing lingering headwinds for an economic recovery that had been showing renewed vigor. [ID:nN13271305]

Research In Motion RIM.TO surged 3.8 percent to C$65.07 after the BlackBerry maker said it has given India the means to access its Messenger service and reiterated that it could make no changes to allow monitoring of secure corporate emails. [ID:nSGE70CB4R]

DragonWave Inc DWI.TO sank 16 percent to C$7.23 after the telecom equipment maker failed to break even in its third quarter as it struggled to escape dependency on its largest customer, Clearwire Corp. [ID:nN12225118]

($1=$0.99 Canadian)

Reporting by Claire Sibonney; Editing by Frank McGurty

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below