CANADA STOCKS-TSX dips as U.S. fiscal fears weigh

Mon Nov 26, 2012 4:28pm EST
 
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* TSX ends down 28.19 points, or 0.23 percent, at 12,185.05
    * Seven of 10 sectors in negative territory, banks flat

    By Claire Sibonney
    TORONTO, Nov 26 (Reuters) - Canadian stocks slipped on
Monday, tracking global markets lower as investors reacted to a
lack of visible progress in budget deficit discussions in
Washington and worried over whether Greece will receive
emergency aid to keep it financially afloat.
    Toronto's main stock index also followed commodity markets
lower, as traders awaited any advance in talks over a series of
spending cuts and tax hikes scheduled to begin next year, which
threaten to drag the economy back into recession.
    "The biggest driver these days undoubtedly is the fiscal
cliff issues in the U.S.," said Elvis Picardo, strategist and
vice president of research at Global Securities in Vancouver.
    Seven of the 10 sectors traded lower, with resource
companies among the biggest drags as commodity prices retreated.
 
    Cenovus Energy Inc shed 1.8 percent to C$32.81,
Suncor Energy lost 0.4 percent to C$33.33 and Barrick
Gold Corp fell 0.6 percent to C$34.97.
    The Toronto Stock Exchange's S&P/TSX composite index
 ended down 28.19 points, or 0.23 percent, at
12,185.05. It had hit a two-week high on Friday. Seven of the 10
sectors were weaker. Financials, the biggest group on the index,
were little changed, supporting by expectations for healthy
upcoming earnings.
    "Last week was a terrific week for global equity markets
including the TSX, so we came in this week expecting a little
bit of giveback after the strong rally last week. That's
happened in a fairly muted fashion," added Picardo.
    Investors also kept an eye on Europe, though problems there
are seen to have moved to the back burner for now.
    In Spain, separatists in Catalonia won a large majority in
regional elections, fueling fears that Spain could split apart
and underscoring the backlash against the country's austerity
measures.
    Euro zone finance ministers and the International Monetary
Fund began their third attempt in as many weeks to release
emergency aid for Greece on Monday. 
    "The political situation in Europe is not resolved," said
Gavin Graham, president at Graham Investment Strategy. "And yet
even if the Greek situation does come to a solution, it will
lead to more austerity, which has led to 50 percent youth
unemployment and 25 percent overall in countries like Greece and
Spain." 
    In addition, if Greece were to exit the EU, Graham said,
investors might expect the same from Spain and Portugal, which
would then reverberate through the French and German banks that
have huge exposure to those countries' sovereign debt.
    Also weighing on the market was the announcement that Bank
of Canada Governor Mark Carney will leave to head the Bank of
England next year.   
    Pharmacy benefit manager Catamaran Corp was one of
the most influential decliners on the index, falling 4.3 percent
to C$47.25 after U.S. insurer UnitedHealth Group Inc 
gave a weaker-than-expected 2013 earnings forecast.
 
    "When one of the behemoths in healthcare services sneezes,
everyone else catches a cold," said Maxim Group analyst Anthony
Vendetti.
    SNC-Lavalin Group Inc shares were down 2.2 percent
to C$40.63. A former executive of the construction company has
been indicted in Switzerland on allegations he laundered money,
according to media reports. 
    Private equity firm Onex Corp eased 0.7 percent to
C$40.25 after it said it will buy U.S.-based insurance broker
USI for $2.3 billion. 
   On the upside, shares in Research In Motion rose 2.5
percent to C$11.90 after CIBC analyst Todd Coupland lifted his
rating on the stock by two notches to 'sector outperformer.'
    Coupland, the third analyst in recent weeks to change his
view on the stock, said RIM's shares look materially undervalued
at current levels given the so far positive feedback being
received from carriers and developers on its soon-to-be-launched
Blackberry 10 devices.  
    Coupland also more than doubled his price target on shares
of RIM to $17 from $8.