June 23, 2014 / 11:30 AM / 5 years ago

TSX steady as positive data offsets Iraq concerns

TORONTO (Reuters) - Canada’s main stock index was little changed on Monday as worries about political instability in Iraq were balanced by upbeat economic data from China and the United States.

A Toronto Stock Exchange (TSX) logo is seen in Toronto November 9, 2007. REUTERS/Mark Blinch

U.S. Secretary of State John Kerry met Iraqi Prime Minister Nuri al-Maliki to push for more inclusive leadership as government forces abandoned the border with Jordan, leaving Iraq’s entire Western frontier outside government control.

Meanwhile, data showed an expansion in Chinese factory sector activity in June for the first time in six months as new orders surged. U.S. housing and manufacturing data also painted a promising picture.

Some fund managers fear the Toronto market, which had its highest-ever close last week, might have run ahead of itself and see few catalysts that could fuel further gains. The benchmark index is up about 11 percent this year, driven largely by a strong rally in the energy sector.

“The only thing that’s probably going to give wheels to the TSX is if oil wants to keep going,” said Keith Richards, portfolio manager and technical analyst at ValueTrend Wealth Management. “Those catalysts that could push oil higher are more of a bet than a probability.

“Would I be going gangbusters about the TSX over the next three months? Probably not,” he added. “I think there are more opportunities on the U.S. side.”

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed down 3.34 points, or 0.02 percent, at 15,105.63. Six of the 10 main sectors on the index were in the red.

Industrials slipped 0.4 percent, with Air Canada ACb.TO losing 7 percent to C$8.77 and Canadian National Railway Co CNR.TO giving back 0.9 percent to C$67.69.

The materials sector, which includes mining stocks, advanced 1 percent, helped by an increase in copper prices. First Quantum Minerals Ltd FM.TO jumped 3.2 percent to C$22.43, and Teck Resources Ltd TCKb.TO added 1.3 percent to C$24.44.

In corporate news, Allergan Inc AGN.N advised investors not to sell their shares to Valeant Pharmaceuticals International VRX.TO, which launched a hostile takeover offer for the California-based Botox maker last week. Allergan said Valeant’s offer was “grossly inadequate”. Valeant shares fell 1.4 percent to C$130.06.

Engineering and construction company SNC-Lavalin Group Inc SNC.TO said that it would acquire British energy services provider Kentz Corp KENZ.L for about 1.16 billion pounds ($1.98 billion) in cash. SNC’s stock climbed 1.7 percent to C$53.31.

Editing by Peter Galloway

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