September 25, 2013 / 12:25 AM / 5 years ago

BlackBerry, telecoms drag TSX lower

TORONTO (Reuters) - Canada’s main stock index fell on Wednesday as telecoms and BlackBerry (BB.TO) led the declines amid investor skepticism about whether a takeover offer for the smartphone maker earlier this week would succeed.

A sign shows TSX information in Toronto September 15, 2008. REUTERS/Mark Blinch

But gold-mining shares bucked the wider trend offsetting some of the index’s declines.

Investor concerns about budget talks in Washington and a potential government shutdown also hurt share prices. The U.S. is Canada’s biggest trading partner.

The Canadian and U.S. markets would like to see a longer-term resolution to the U.S. budget and debt negotiations this time, unlike on previous occasions, said Marcus Xu, portfolio manager at MY Capital Management Corp in Vancouver.

“The market is pretty confused. Nobody knows what to do,” he added. “If anything, people want to be conservative and not take too much risk.”

Separately, the market digested data showing orders for long-lasting U.S. manufactured goods barely grew in August, as well as a report indicating sales of new single-family homes in America rose in August but held near their lowest levels this year.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed down 12.18 points, or 0.09 percent, at 12,836.71. Seven of the 10 main sectors on the index ended in the red.

But the materials sector, which includes mining stocks, added 1.4 percent, helped by gains in gold producers. With the price of bullion rising 1.3 percent, gold miners jumped 2.2 percent.

“Today it’s all about precious metals,” Xu said. “They tend to rally when there’s a lot of uncertainty.”

Goldcorp Inc (G.TO) climbed 1.7 percent to C$26.84, and Teck Resources Ltd TCKb.TO jumped 1.4 percent to C$28.58.

Shares of telecoms providers declined 0.9 percent. Telus Corp (T.TO) gave back 2.2 percent to C$34.78, and BCE Inc (BCE.TO) fell 1 percent to C$44.13.

The industrials sector shed 0.7 percent. Canadian National Railway Co (CNR.TO) dropped 1.3 percent to C$102.77.

BlackBerry slipped nearly 6 percent to C$8.26 after a Globe and Mail report said Fairfax Financial Holdings Ltd (FFH.TO) was seeking more than $1 billion in equity investments from institutional investors to back its preliminary $4.7 billion plan to acquire the smartphone maker.

The report cited unnamed sources saying that as of Tuesday only one pension fund, the Ontario Teachers’ Pension Plan, was seriously considering joining a takeover consortium. Teachers declined to comment on the report.

But Fairfax Chief Executive Prem Watsa told Reuters in an interview he is confident the consortium he leads can find the money needed to fund the $4.7 billion bid.

Editing by Diane Craft

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