December 14, 2012 / 4:08 PM / 6 years ago

CANADA STOCKS-TSX slips; China data boosts resource stocks

* TSX down 4.66 points, or 0.04 percent, at 12,284.54

* Index on track for 1 percent gain for week

* Global data paints picture of uneven recovery

By Alastair Sharp

TORONTO, Dec 14 (Reuters) - The main Canadian stock index inched lower on Friday, as gains in some mining and energy stocks, spurred by healthy Chinese data, were offset by investor fears over stalled U.S. budget talks.

A slew of global data provided an uneven picture of economic recovery and stagnation, with Europe seemingly stuck in a low-growth mode and China and the United States showing signs of recovery.

China’s vast manufacturing sector expanded in December at its fastest pace in 14 months as new orders and employment rose, a survey showed on Friday.

Evidence that China’s speedy growth trajectory is getting back on track is typically positive for Canada, which provides the giant Asian economy with raw materials.

“The one that people some to be missing is the uptick in some of the Chinese growth numbers,” said John Ing, president of Maison Placements Canada, adding that much attention was still focused on negotiations to solve a looming U.S. budget crisis.

Teck Resources Ltd gained 1.4 percent to C$35.05 and First Quantum Minerals Ltd added 1.4 percent to C$21.08.

Dundee Corp shares jumped 13 percent to C$30.16 after the financial firm said it would spin off real estate assets.

By mid-morning, the Toronto Stock Exchange’s S&P/TSX composite index was down 4.66 points, or 0.04 percent, at 12,284.54. It is on track for a 1 percent gain for the week.

President Barack Obama and House of Representatives Speaker John Boehner held a “frank” face-to-face meeting on Thursday in an effort to break an impasse in talks to avert the “fiscal cliff” of steep tax increases and spending cuts, which kick in early in 2013.

Frustration is mounting over the recent lack of progress in negotiations that have become bogged down in a daily round of finger-pointing.

If a deal is not reached, many economists believe the U.S. economy will fall back into recession, which would hurt Canadian businesses that sell into the world’s largest economy.

Canadian manufacturing sales unexpectedly plunged by 1.4 percent in October from September in the latest sign the economy is struggling to cope with market problems abroad and due to the effect of a strong Canadian dollar.

The domestic data was at odds with numbers out of the United States that showed demand picking up.

In Europe, disappointing German manufacturing sector figures and a rise in euro zone unemployment overshadowed a small pick-up in wider purchasing manager data.

Canadian resource stocks received a boost this week from Ottawa’s approval of two big deals last week and its clarification of its stance on state-owned enterprise investment in the oil sands.

Encana Corp tested the new policy with the announcement on Thursday of a joint venture with PetroChina Co Ltd.

“It just reinforces that this business is capital intensive and the ones with the capital are the Chinese,” Maison’s Ing said. “We’re going to see more of it, so it’s good that we didn’t put up higher barriers to them.”

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