August 24, 2011 / 3:11 PM / 6 years ago

CANADA STOCKS-TSX flat as weak golds outweigh stronger banks

   * TSX down 0.91 of a point to 12,337.42
 * Seven of the 10 main sectors firmer, golds weigh  (Updates with details, commentary)
 By Claire Sibonney
 TORONTO, Aug 24 (Reuters) - Toronto’s main stock index was little changed on Wednesday morning as sliding gold prices and profit-taking after the previous session’s big rally offset optimism over bank earnings and positive U.S. data.
 Financials were the most influential gainers on the TSX, rising 1.5 percent. They were buoyed by surprisingly strong Bank of Montreal (BMO.TO) earnings on Tuesday, the first in a wave of bank earnings reports over the next two weeks.
 Royal Bank of Canada (RY.TO) rose 2.1 percent to C$51.12, Toronto-Dominion Bank (TD.TO) added 2.1 percent to C$74.85, and Bank of Nova Scotia (BNS.TO) advanced 1.8 percent to C$52.34.
 On the U.S. data front, new orders for long-lasting manufactured goods surged in July and the Congressional Budget Office offered an upbeat forecast on the worrisome budget deficits. [ID:nN1E77N096] [ID:nN1E77N0JA]
 ”Risk appetite is getting back on and you can see that from the recent price action in gold, said Francis Campeau, a broker at MF Global Canada in Montreal, noting bullion prices dropped nearly 5 percent from their record high in the past two sessions. [GOL/]
 At 10:38 a.m. (1438 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 0.91 of a point to 12,337.42. Seven of the 10 main groups were stronger.
 Gold miners were down 3.3 percent, holding back the wider gains. The market was also weighed down by profit-taking after its the more than 2 percent rally on Tuesday, the TSX’s biggest rally in nearly two weeks.
 Goldcorp Inc (G.TO), which plunged 5.2 percent, was the heaviest laggard on the index, followed by Barrick Gold Corp (ABX.TO), down 3.8 percent to C$48.19, and Kinross Gold (K.TO), off 3.7 percent to C$16.32.
 “I‘m keeping my eye on gold, it’s been trading as a kind of reverse indicator to the equity market and its recent weakness is quite market favorable; it’s telling you something,” said. Campeau.
 Investors were also focusing on Friday’s highly anticipated speech by Federal Reserve Chairman Ben Bernanke, though there was growing doubt he would offer hints about more economic stimulus.
 Speculation has been widespread in financial markets that Bernanke will use his speech at a central bankers conference in Jackson Hole, Wyoming, to signal a new monetary offensive to support a faltering U.S. economy.
 “The street is perhaps scared of any sort of positive intervention by the Fed that they will come up with something to ‘save the world’ again, so I think shorts are being cautious,” added Campeau.
  ($1=$0.99 Canadian)  (Reporting by Claire Sibonney; editing by Rob Wilson)                                        

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