November 10, 2014 / 2:48 PM / 4 years ago

TSX steady as China deal offsets fall in resources

TORONTO (Reuters) - Canada’s main stock index was little changed on Monday as declines in the energy and gold-mining sectors, which followed commodity prices lower, were offset by optimism over a trade deal that gives global investors access to China’s stock market.

A man walks past an old Toronto Stock Exchange (TSX) sign in Toronto, June 23, 2014. REUTERS/Mark Blinch

A strong U.S. dollar fueled a decline in the prices of oil and bullion. The energy sector dropped 1.3 percent, and shares of gold miners dived 5.9 percent.

After recording four straight weekly gains, the resource-sensitive TSX hit a one-month high before giving up some of its early advances.

A long-awaited trading link between Hong Kong and Shanghai will open on Nov. 17, an important step towards opening China’s capital markets that will give foreign and Chinese individual investors unprecedented access to each others’ stock exchanges.

“This is a significant milestone in capital markets history. It’s a positive for Canada,” said Marcus Xu, portfolio manager at M.Y. Capital Management Corp in Vancouver.

“I’ll be buying commodity stocks at this point,” he added. Xu says the prices are attractive and the fundamentals are in place for a rebound in natural resource stocks and the broader Canadian equity market.

The Toronto Stock Exchange’s S&P/TSX composite index closed up 18.97 points, or 0.13 percent, at 14,709.80. Eight of the 10 main sectors on the index were higher.

Among shares of energy producers, Canadian Natural Resources Ltd lost 0.7 percent to C$40.57 and Encana Corp shed 1.9 percent to C$21.05.

In the gold-mining sector, Barrick Gold Corp was down 6.5 percent at C$12.90 and Goldcorp Inc fell 4.4 percent to C$21.69.

Bank stocks helped support the gains, with Toronto-Dominion Bank adding 1 percent to C$56.34 and Bank of Nova Scotia up 1.1 percent at C$68.20.

BlackBerry gained 5.8 percent to C$12.63. The technology company’s CEO said that it has completed the first phase of its two-year turnaround plan, is focused on profitability, and will not spread itself thin by attempting to launch too many new devices.

Editing by Grant McCool

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