November 5, 2013 / 1:17 PM / 5 years ago

TSX flat as mining drop offset by Open Text, Encana

TORONTO (Reuters) - Canada’s main stock index was virtually unchanged on Tuesday as strong gains in information technology company Open Text Corp OTC.TO and natural gas producer Encana Corp (ECA.TO) offset weakness in gold-mining shares.

An electronic board displays the midday TSX index in Toronto February 16, 2011. REUTERS/Mark Blinch

Open Text’s shares soared 10 percent to C$85.32 after the software maker said it would buy privately held cloud services company GXS Group Inc for $1.17 billion. They had the biggest positive influence on the market.

Encana surged more than 3 percent after the company said it will cut about 20 percent of its workforce and spin off assets.

Investors digested mixed U.S. economic data that showed service-sector business activity picking up in October, but new order growth slowed for a second straight month.

Uncertainty about whether the European Central Bank will cut interest rates and what direction the U.S. Federal Reserve will take with its monetary stimulus also undermined sentiment.

The Toronto Stock Exchange’s benchmark S&P/TSX composite index has gained nearly 5 percent in the past month, benefiting from improving global macroeconomic conditions.

“We think we’re going to end the year on a strong note because there’s still a lot of money on the sidelines,” said Elvis Picardo, strategist and vice president of research at Global Securities in Vancouver. “That money has to be put to work.”

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed down 0.07 of a point at 13,361.71. Six of the 10 main sectors on the index were lower.

Gold miners fell more than 1 percent. Among them, Goldcorp Inc (G.TO) gave back 0.5 percent to C$25.97.

Shares of energy producers were little changed, with a 0.6 percent drop in Canadian Natural Resources Ltd (CNQ.TO) offset by the gain in Encana.

Encana, which advanced to C$19.21, said it will invest nearly three-quarters of its 2014 capital spending budget in its more lucrative oil and liquid gas assets.

“They’re doing the right thing, but they probably should’ve done it two years ago, when (natural gas) prices tanked,” said David Cockfield, managing director and portfolio manager at Northland Wealth Management. “It’s a recognition of the reality that gas prices are low and going lower.”

($1=$1.04 Canadian)

Editing by Peter Galloway and David Gregorio

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