CANADA STOCKS-TSX ends 4-day climb after bid for Astral blocked

Fri Oct 19, 2012 5:08pm EDT
 
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* TSX down 50.14 points, or 0.4 percent, at 12,415.98
    * Index posts 1.75 percent gain for the week
    * Nine of the 10 main groups lower on Friday
    * Astral Media shares plunge 15.94 percent to C$39.51

    By Solarina Ho
    TORONTO, Oct 19 (Reuters) - Canada's main stock index
finished lower on Friday, breaking a four-day winning streak, as
shares of Astral Media Inc plunged almost 16 percent
after the country's broadcast regulator blocked its planned
takeover by BCE Inc.
    Negative sentiment from quarterly U.S. corporate results
also spilled into Canadian stocks as earnings from bellwether
companies disappointed investors already concerned about global
growth and Europe's debt crisis.
    "A bit of this end-of-the-week sell-off is some
disappointment around earnings from some companies within the
S&P 500 and the Dow," said Craig Fehr, Canadian market
strategist at Edward Jones in St. Louis, Missouri.
    Earnings are "really reflecting the pressure that corporate
profits are under right now given the broader economic
backdrop," he said.
    Multiple analysts cut their price targets for Astral Media
after the Canadian Radio-Television and Telecommunications
Commission blocked BCE's C$3 billion ($3.05 billion) bid. Astral
was one of the most influential decliners on the index, with its
shares falling to C$39.51. BCE fell 1.76 percent to C$42.86,
while the overall telecoms sector was off 0.33 percent.
    The consumer discretionary sector, home to Astral and other
media companies, was down 1.26 percent. Corus Entertainment
 shed 2.83 percent to C$22.33.
    "Obviously there were a lot of people who were disappointed
that this deal didn't go through," said Fred Ketchen, director
of equity trading at ScotiaMcLeod.
    "BCE is certainly a significant weight within the index. ...
It does have a bearing on sentiment, it does have a bearing on
the market."
    The CRTC said the deal would give too much power to BCE,
already Canada's biggest telecoms company. It was the biggest
deal the commission has ever blocked, marking a shift toward
consumer advocacy. 
    The Toronto Stock Exchange's S&P/TSX composite index
 gave back 50.14 points, or 0.4 percent to finish at
12,415.98. Nine of the index's 10 main groups were lower. For
the week, the index posted a 1.75 percent gain. 
    "We started the week with a host of much
better-than-expected economic data. ... It set a positive tone
for the week in terms of investors feeling a little better about
the trajectory of the North American economy," said Fehr.
    Materials, home to mining companies, was the lone gainer and
was up 0.26 percent, bolstered primarily by gold mining firms,
which bounced back from a 2.42 percent drop on Thursday.
    Goldcorp was up 2.01 percent at C$43.05, while Yamana
Gold Inc climbed 1.48 percent to C$19.23. Seven of the
10 most influential advancers were gold companies.
    Also dragging on the index were technology stocks, which
fell 1.36 percent, in reaction to weaker-than-expected results
from Google Inc and Microsoft Corp.
    The heavily weighted energy group shed 0.53 percent, while
the financial group gave back 0.38 percent.
    Fehr said lingering worries in Europe also weighed.
    "Our expectation as we progress through the year and for
some time to come is Europe is going to continue to have spates
of volatility. ... I think we're getting a little bit of that
today following on the less optimistic corporate profit news,"
he said.