CANADA STOCKS-TSX slips as gold miners weigh, banks trade higher

Mon Dec 30, 2013 4:39pm EST
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* TSX ends down 6.59 points, or 0.05 pct, at 13,581.39
    * Gold miners weigh, bullion heads for historically bad year

    By Alastair Sharp
    TORONTO, Dec 30 (Reuters) - Canada's main stock index
slipped marginally in light trade on Monday, with major gold
miners weighing heavily as bullion headed for its worst annual
performance in 32 years, while gains for some financial stocks
softened the blow.
    Two of the world's largest gold producers had the most
negative impact on the index, with Goldcorp Inc falling
3.7 percent to C$22.25 and Barrick Gold Corp off 2.6
percent at C$18.20.
    Still, the index wasn't far off its Friday peak, which was
the highest level seen since mid-2011. Investors expressed
optimism that 2014 will exceed that roughly 9 percent gain the
Toronto index is on track to notch this year.
    "I think commodities will outperform next year," said Marcus
Xu, a portfolio manager at MY Capital Management in Vancouver. 
    Canada is home to an abundance of resource-related
companies, whose struggles have partly explained the Toronto
Stock Exchange's S&P/TSX composite index 
underperformance versus U.S. indexes this year.
    Xu said the price of various resources was weighed down by
investors concerned about Chinese growth and troubles in China's
financial and real estate sectors, and that those issues were
being resolved after a leadership transition.
    The Canadian index has sharply underperformed the broad S&P
500 index, whose 30 percent gain has driven it to
all-time highs.
    The annual gain for the S&P 500 and other U.S. indexes was
supported by the U.S. Federal Reserve's massive stimulus
efforts, which the central bank only this month decided to start
to trim.
    "On balance, we believe 2014 is going to be a better year
than 2013," said John Kinsey, a portfolio manager at Caldwell
Securities. "That's based on some of the economic numbers...the
U.S. reduced their taper, they seem to think their economy is
going to find some traction."
    The Canadian index ended down 6.59 points, or 0.05 percent,
at 13,581.39. It traded in a tight 25-point range in the
    On the positive side, Valeant Pharmaceuticals International
Inc gained 2.8 percent to C$124.94, Toronto-Dominion
Bank added 0.4 percent to C$100.08, and Bank of Nova
Scotia rose 0.5 percent to C$66.22.  
    The price of gold has fallen nearly 30 percent this year,
weighing on the many mining companies listed in Toronto and
dragging down the index as a whole. 
    An index of global gold miners, mostly Canadian companies,
has fallen 48 percent this year.
    Caldwell's Kinsey said that the depressed price of gold -
now at $1,200 an ounce - should lead to mine closures which in
turn would put a floor under the price and help the sector
stabilize next year.
    MY's Xu wasn't so sure. "Gold is still under a lot of
pressure. I'm not as eager to jump into the gold sector versus
the other commodity sectors," he said.