October 16, 2013 / 9:07 PM / 6 years ago

CANADA STOCKS-TSX up as U.S. debt deal nears; tempered by resources, SNC

* TSX up 8.75 points, or 0.7 percent at 12,940.21
    * Energy and financials led 7 of 10 main groups higher
    * Materials and industrials dragged lower by gold miners,

    By Alastair Sharp
    TORONTO, Oct 16 (Reuters) - Canada's main stock index ended
higher on Wednesday as a political deal to avert a U.S. default
neared completion, but gains were capped by weak materials
stocks and a sharply lower earnings revision by SNC-Lavalin
Group Inc.
    The TSX tracked larger gains in U.S. equity markets,
which rose on optimism that a fiscal deal that would prevent
Canada's biggest trade partner defaulting on its debt could be
wrangled between Washington lawmakers at the eleventh-hour.
    North American equities are likely to keep fluctuating on
each twist and turn of the debt saga, and then resume their
focus on the data that will inform the Federal Reserve's
decision on when to pull back its monetary stimulus, said
Michael Sprung, president at Sprung Investment Management Inc.
    "Until we see something towards a more sustainable course
for the U.S. fiscal situation I don't think we're going to be
out of the woods for a while," he said.
    "Today it's the fiscal concerns and tomorrow it'll be the
next economic release, whether it be employment or manufacturing
or house prices or whatever."
    The Toronto Stock Exchange's S&P/TSX composite index
 closed the session up 25.75 points, or 0.2 percent, at
12,957.21. Nine of the index's 10 main groups ended in positive
territory. Wall Street stocks jumped more than 1 percent.
    "The U.S. market is popping up on the upside, so I guess
they're optimistic, and it'll eventually drag us up," said Paul
Hand, managing director at RBC Capital Markets.
    The heavily weighted financials and energy groups were up
0.3 percent and 0.6 percent respectively. 
    Brent crude oil prices rose above $110 a barrel, while U.S.
crude rose to $101.72 per barrel on U.S. budget hopes. Meg
Energy Corp rose 2.7 percent to C$35.24, while Encana
Corp gained 0.7 percent to trade at C$18.43. 
    Tempering advances was a 1.2 percent drop in materials
stocks. Gold miners in particular retreated, with Agnico Eagle
Mines Inc off 3.5 percent at C$24.85 and Goldcorp Inc
 off 2.2 percent at C$24.41.
    Bullion prices retreated as investors moved away from the
safe-haven metal amid prospects of a last-minute U.S. debt deal.
    Still RBC's Hand said bullion prices have been very volatile
of late. "Gold is becoming very hard to prognosticate," he said.
    SNC-Lavalin shares took a 4.5 percent hit to
C$42.13 after the Canadian engineering and construction firm
said it was slashing its fiscal 2013 outlook. The overall
industrials group was off 0.1 percent.
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