October 23, 2013 / 12:44 PM / 5 years ago

TSX's six-day rally ends despite railway gains

TORONTO (Reuters) - Canada’s main stock index slipped on Wednesday, ending a six-session rally, as strong results from the country’s two big railways failed to offset heavy losses in banking, energy and mining stocks.

People walk past an electronic board displaying the midday TSX index in Toronto in this February 16, 2011 file photo. REUTERS/Mark Blinch/Files

“It’s a bipolar market today. It’s difficult for the index to get any traction when the three biggest groups are down,” said Elvis Picardo, portfolio manager at Global Securities in Vancouver.

The financial, energy and materials groups combined account for more than 70 percent of the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE, which ended down 4.74 points, or 0.04 percent, at 13,243.32.

Strong gains for the railways limited the index’s loss. Canadian Pacific Railway Ltd (CP.TO), the country’s No. 2 rail operator, surged 10.2 percent to C$148.53 after reporting a 45 percent jump in profit as freight revenue rose and operating costs fell.

Canadian National Railway Co (CNR.TO), the No. 1 operator and focus of scrutiny after one of its trains derailed and caught fire last weekend, jumped 4.4 percent to C$114.59. Late on Tuesday, it reported a market-beating third-quarter profit and record revenue as well as announcing a two-for-one stock split and share buyback plan.

The railways should prosper as the economy grows but the potential for growing opposition to their carriage of oil is a concern, said Rick Hutcheon, president and chief operating officer at RKH Investments.

“A great deal of the current growth in their earnings is coming from oil-by-rail,” he said.

Mining had the heaviest losses as the price of gold slipped after hitting four-week highs a day earlier. Copper prices also fell. <GOL/> <MET/L>

First Quantum Minerals Ltd (FM.TO) fell 3.9 percent to C$18.60, and Barrick Gold Corp (ABX.TO) was down 1.7 percent at C$20.12.

Centerra Gold (CG.TO) plunged 23.2 percent to C$4.10 as Kyrgyzstan’s parliament voted to seek control over a proposed gold mining venture with Centerra, demanding a 50-50 agreement signed last month be torn up.

Oil and gas stocks also weighed heavily, pressured by ample supplies and expectations of a further inventory buildup in the United States, the world’s top consumer.

Suncor Energy Inc (SU.TO) retreated 2.3 percent to C$36.64, and Canadian Natural Resources Ltd (CNQ.TO) declined 1.4 percent to C$32.53.

But Encana Corp, which is restructuring under a new CEO, rose 1.9 percent to C$19.15 after it reported its second straight quarterly profit.

Elsewhere, CGI Group (GIBa.TO) fell 3.1 percent to C$34.97. The contractor that built HealthCare.gov has fallen 9 percent in the past week as the website for the U.S. health insurance program, or Obamacare, suffered technical glitches.

($1=$1.04 Canadian)

Editing by Peter Galloway

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