July 29, 2008 / 2:51 PM / in 9 years

UPDATE 1-Toronto stocks slip as resources offset Teck deal

(Updates to midmorning)

*TSX slips as energy and gold producers weigh

*Fording up after $14.1 billion bid from Teck Cominco

*Rogers falls after wireless growth slows

TORONTO, July 29 (Reuters) - The Toronto Stock Exchange’s main index dipped on Tuesday as gains from Teck Cominco’s $14.1 billion deal to buy Fording Canadian Coal Trust were offset by energy and gold producers that fell along with their underlying commodities.

Shares of Rogers Communications Inc (RCIb.TO) also slid, losing 4.8 percent, after the telecommunications and media group said it swung to a quarterly profit but its wireless growth slowed.

But the acquisition in the mining sector helped support the index as Fording FDG_u.TO jumped 8.1 percent after Teck Cominco TCKb.TO said it would buy the company in a cash and stock deal, doubling Teck’s exposure to the metallurgical coal market. Shares of Teck were up 1.5 percent.

“I think it’s a sign that at some point in time the potential for M&A activity will pop,” said Paul Taylor, chief investment officer at BMO Harris Investment Management Inc.

“With the re-rating of equities across the board, one would expect at some point in time for motivated buyers with cash on the sidelines to emerge and take advantage of some of the more economic prices for strategic assets,” Taylor said.

The S&P/TSX composite index .GSPTSE was down 26.25 points, or 0.2 percent, at 13,277.71, with four of its 10 main subgroups lower.

The energy sector led the way down, losing 1.7 percent. Suncor Energy (SU.TO) was down C$1.49, or 2.7 percent, at C$53.11, and Canadian Natural Resources (CNQ.TO) fell C$1.15, or 1.5 percent, to C$77.59.

The group followed the price of oil lower, as crude fell more than $3 to $121.66 a barrel on a rising U.S. dollar and worries of weakening demand.

The materials sector edged down 0.5 percent, hurt by a decline in its gold producers as bullion also weakened on the stronger greenback. Agnico-Eagle Mines (AEM.TO) slipped C$1.76, or 2.9 percent, to C$58.50, and Barrick Gold (ABX.TO) was off C$1.46, or 3.2 percent, to C$43.98.

Fording climbed C$6.80 to C$90.60, and Teck was up 59 Canadian cents at C$41.00.

Investors were also taking in a fresh round of quarterly results, including George Weston (WN.TO), which fell 93 Canadian cents, or 2.1 percent, to C$43.34, after it reported a lower profit partly due to restructuring charges. ($1=$1.03 Canadian) (Reporting by Leah Schnurr; Editing by Peter Galloway)

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