CANADA STOCKS-TSX little changed as shares of Manulife weigh

Thu Sep 4, 2014 10:58am EDT
 
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By Leah Schnurr and Alastair Sharp
    TORONTO, Sept 4 (Reuters) - Canada's main stock index was
little changed on Thursday, weighed by shares of Manulife and
WSP Global after both companies separately announced deals to
buy operations from British firms.  
    That was offset by gains in the consumer staples sector as
Alimentation Couche-Tard, a convenience store and
retail chain, rose after several analysts raised their price
target on the stock. Couche-Tard earlier in the week reported
better-than-expected quarterly profit and its shares were up 3.4
percent at C$36.66. 
    Risk sentiment more broadly was lifted after the European
Central Bank cut interest rates to a new record low and launched
a plan to pump money into the euro zone economy. But it gave Bay
Street only a small amount of support. 
    "There are cross currents at work," said John Ing, president
of Maison Placements Canada in Toronto. 
    "There's the move down in interest rates in Europe which
caused a lot of volatility in the currencies, then you had the
fundamentals such as the big Manulife deal for Standard Life's
Canada operations." 
    Manulife Financial Corp was the biggest weight on
the index, down nearly 2 percent after it was announced late on
Wednesday that it will buy the Canadian operations of Britain's
Standard Life in a near-$4 billion deal. Manulife was
most recently trading at C$21.94. 
    "Longer-term, this gives it a very big stake in the Quebec
market in which they are light," Ing said of the deal.
    The Toronto Stock Exchange's S&P/TSX composite index
 edged up 9.18 points, or 0.06 percent, at 15,666.81.
Seven of the index's 10 main groups were in positive territory.
    WSP Global fell 3.4 percent to C$35.69 after it
said it would buy Balfour Beatty's U.S. professional
services division. 
    Energy shares edged higher, with Suncor Energy 
leading the way, up 0.8 percent at C$44.48. Energy stocks 
 have risen about 17 percent this year, but Ing said a
build up in commodity inventories could be a bigger concern than
stock valuations.
    "We're more concerned about the build up of the commodities,
whether it's oil, whether it's natural gas inventories," said
Ing. There's been concern about supply interruptions but
meanwhile, inventories still keep on building and eventually
that'll put pressure on prices and of course some of these stock
prices."

 (Editing by W Simon)