CANADA STOCKS-Resources pull TSX lower; U.S. budget cuts imminent

Fri Mar 1, 2013 11:22am EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

* S&P/TSX index down 60.74 points, or 0.47 pct, at 12,761.09
    * Eight of 10 main sectors decline
    * Magna shares up more than 5 percent after results

    By John Tilak
    TORONTO, March 1 (Reuters) - Canada's main stock index fell
on Friday, as energy and materials shares followed commodity
prices lower and Washington failed to cut a deal to prevent U.S.
budget cuts that could threaten the recovery of Canada's largest
trading partner.
    Investor sentiment was further dampened by weak economic
data from Europe and the political stalemate in Italy.
Meanwhile, data showed Canada's economy grew at a sluggish pace
in the final quarter of 2012 after a similarly disappointing
third quarter. 
    The U.S. government headed for deep belt-tightening, known
as "sequestration," as President Barack Obama met Republican and
Democratic leaders at the White House in search of a last-minute
    "This scares the market. People are nervous," said Sal
Masionis, stockbroker at Brant Securities.
    The negotiations to arrive at a deal could drag on for weeks
and be an overhang for the market, he added.
    The Toronto Stock Exchange's S&P/TSX composite index
 was down 60.74 points, or 0.47 percent, at 12,761.09.
Eight of the 10 main sectors on the index were in the red.
    The gloomy economic news weighed on commodity prices and
pulled resource stocks lower.
    Energy stocks tumbled 1.2 percent, tracking a decline in oil
    Canadian Natural Resources Ltd fell 1.9 percent to
C$30.92, and Suncor Energy Inc gave back 1.2 percent to
    The materials sector, which includes mining stocks, fell
nearly 1 percent. Gold prices extended their fall, following a
string of monthly losses. 
    Barrick Gold Corp dropped 1.8 percent to C$30.72.
    Financials, the index's weightiest sector, were little
    "People are seeking safe havens," Masionis said. "The banks
are probably the safest port in the storm."
    Four of Canada's top banks, including Royal Bank of Canada
 and Toronto-Dominion Bank, posted
stronger-than-expected quarterly profits on Thursday.
    In company news, Magna International Inc reported a
12.5 percent rise in profit on strong performance at its North
American business. The auto-parts maker's shares rose 5.3
percent to C$57.75. The stock was one of the biggest individual
positive influences on the index.