RPT-Bay Street Week Ahead-No Santa rally seen for Canada
(Repeats Friday's column)
By Scott Anderson
TORONTO Dec 21 (Reuters) - A "Santa Claus" rally has become a Toronto Stock Exchange tradition, but the economic "Grinch" appears to have stolen Christmas this season.
Equity indexes usually rise this time of year as investors anticipate an injection of funds into the market in early January and fund managers dress up their portfolios by loading up on the year's solid performers.
This year, too many factors -- a collapse of consumer confidence, tight credit, a dismal economic outlook and worries over the future of the auto sector -- have all but erased hopes of the kind of rally that the TSX has experienced in nine of the past 10 years.
In 2007, the market rallied 475 points in the final eight sessions to cap off a gain of 7.2 percent for the year.
"I think everybody wants to believe in Santa after the year that we've had," said Patricia Croft, chief economist at RBC Global Asset Management.
"It continues to be a tug of war of various factors but I think there are a lot of people very anxious to close the books on this year and to believe in Santa."
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE, which is down more than 40 percent so far this year as the global credit crisis worsened, is showing little hope of any sustained rally going into 2009. Continued...