CANADA STOCKS-TSX slips as election uncertainty weighs
* TSX ends down 13.70 points or 0.1 pct, at 14,000
* Four of TSX's 10 main groups lower
* Energy stocks down 0.5 pct, materials off 0.4 pct
* Federal budget may prompt TSX drop on Wednesday (Updates after budget, adds commentary)
By Claire Sibonney
TORONTO, March 22 (Reuters) - Toronto's main stock index dipped on Tuesday, following a three-day rise, with the market expected to see a further decline on Wednesday after Canada's opposition parties said they would vote against the federal budget, raising the likelihood of an election.
A spring vote appeared all but inevitable after the market closed as all three opposition parties said they could not support the budget presented by the minority Conservative government. [ID:nN22192715]
The government promised to slice the federal deficit by a quarter this year and return to surplus in 2015, while offering a host of treats, widely seen as aimed at winning the support of the New Democratic Party (NDP).
"Like anything else, markets hate uncertainty," said Serge Pepin, head of investments at BMO Investments.
"We view this budget as having been a responsible budget and ... hopefully investors will look at Canada on its merits. I think that the Canadian equity market has proven itself time and time again so we believe that if there is any type of hiccup in performance that it would be somewhat short-lived."
Commodity issues gave back some recent gains as many traders kept to the sidelines amid political uncertainty overseas and at home.
The energy sector was down 0.5 percent after finishing up 1.61 percent on Monday, while the materials group, home to mining companies, was down 0.4 percent -- despite higher prices for oil and base metals.
Canadian Natural Resources (CNQ.TO: Quote) slid 0.6 percent to C$48.44, while Canadian Oil Sands COS.TO fell 1.7 percent to C$31.49.
Fertilizer giant Potash Corp (POT.TO: Quote) was down 1.3 percent at C$53.97 and Teck Resources TCKb.TO shed 1.5 percent to C$52.07.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended down 13.70 points or 0.1 percent, at 14,000, giving back some of Monday's 1.62 percent gain.
Four of the TSX's 10 main groups were lower. Financial stocks helped cushion the decline, rising 0.2 percent. Bank of Nova Scotia (BNS.TO: Quote) was up 1 percent at C$59.21.
Gold-mining shares were also firmer, rising 0.5 percent, with Agnico Eagle AEM.TO up 0.6 percent at C$66.23.
Events in Canada and overseas continued to weigh on market sentiment and kept many investors playing wait-and-see.
"Stock markets here and south of the border (were) actually fairly quiet today," said John Kurgan, senior market strategist at Lind-Waldock Canada. "Pretty much market makers on the floor and investors in general just kind of sitting on their hands, waiting," he added noting lighter than average volumes.
Muammar Gaddafi's forces attacked two western Libyan towns, killing dozens of people, while rebels were pinned down in the east and NATO tried to resolve a dispute over who should lead the coalition air campaign. [ID:nLDE72L00C]
Meanwhile, Japan continued to battle a quake-crippled nuclear plant as radiation fears grew. [ID:nL3E7EL23A]
While Pepin expects the market's initial reaction to the budget to be negative on Wednesday, he thinks international events will eventually override domestic issues, and expects stronger commodity prices will continue to support Canada's resource-driven market.
"There is still a chance for the parties to talk, so we're all hoping that there is going to be some resolution to that, however ... what's happening globally right now in the Middle East, Northern Africa as well as still Japan, that's really sort of taking a precedence over everything else at this point."
($1=$0.98 Canadian) (Additional reporting by Solarina Ho; editing by Rob Wilson)
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