CANADA STOCKS-TSX rises as energy shares and CP Rail gain

Wed Dec 5, 2012 5:22pm EST

* TSX rises 20.11 points, or 0.17 percent, to 12,157.29
    * CP Rail adds 4 percent after job cuts
    * Primaris Retail gains more than 14 pct after buyout offer

    By John Tilak
    TORONTO, Dec 5 (Reuters) - Canada's main stock index nudged
higher on Wednesday, as investors cheered a cost-cutting plan at
Canadian Pacific Railway Ltd and energy stocks rose on
optimism about Chinese growth, while gold miners fell.
    Canadian Pacific Railway gained 4.1 percent to C$96.82 after
the country's second-biggest railroad said it plans to cut 4,500
jobs by 2016 as part of a drive by its new chief executive to
slash costs. 
    "This is what shareholders have been looking for. This is
what they have been hoping - that CP will face the challenges
that they have. The new CEO is making his mark," said Fred
Ketchen, director of equity trading at ScotiaMcLeod.
    The Toronto Stock Exchange's S&P/TSX composite index
 closed up 20.11 points, or 0.17 percent, at 12,157.29.
    Energy stocks notched the broadest gains as hopes about
China's economic growth were bolstered after Communist Party
chief Xi Jinping said the country's leaders will maintain their
fine-tuning of economic policies in 2013. 
    Suncor Energy Inc gained 1.3 percent to C$32.68, and
Canadian Natural Resources Ltd advanced 1.3 percent to
C$27.78. 
    "There are expectations of better global growth, driven by
ongoing U.S. budget talks and speculation that the Chinese
economy is turning around for the better," said Elvis Picardo, a
strategist at Global Securities in Vancouver.
    "There is also some degree of takeover speculation. Many
Canadian energy producers are trading at pretty attractive
valuations. The M&A activity in the U.S. certainly points to the
attractiveness of energy assets in North America," Picardo said.
    U.S. miner Freeport-McMoRan Copper & Gold Inc on
Wednesday made a combined $9 billion move on Plains Exploration
& Production Co and McMoRan Exploration Co to
diversify into the U.S. energy sector. 
    Also on Wednesday, Canada said its Dec. 10 deadline for
ruling on a bid by China's CNOOC Ltd for Nexen Inc
 could be extended. 
    Nexen shares dipped after the comments, but still closed up
0.4 percent at C$24.26.
    Investors have been eagerly awaiting a Canadian decision on
whether to approve two takeovers of domestic energy companies by
foreign state-owned enterprises. 
    Gold miners had another tough day, accounting for seven of
the eight heaviest drags on the index, as bullion fell to a
one-month low and Goldman Sachs lowered its price forecast for
the precious metal. 
    Canada's gold mining sub-sector has fallen more than 16
percent so far this year.
    Goldcorp Inc shed 3.3 percent to C$36.61, Barrick
Gold Corp fell 2.4 percent to C$33.12, and Eldorado
Gold was down 4.5 percent at C$13.26. The index's
materials sector, which includes mining stocks, lost 1.4
percent.
    In company news, shares of Primaris Retail REIT 
rose 14.6 percent to C$26.40 after a consortium led by Canada's
KingSett Capital offered about C$2.6 billion ($2.6 billion) to
acquire the Canadian shopping mall owner. 
    Overall equity momentum may be muted as the year draws to a
close.
    "I don't see a year-end bounce, if anything there is a
year-end fall, a slight decline," said Vincent Delisle, an
investment strategist at Scotiabank. "I'm not looking for a
Santa Claus rally," he added, pointing to tortuous U.S. budget
negotiations as the biggest overhang.
    Delisle said he sees the benchmark S&P/TSX index rising to
12,800 next year and recommended investors be overweight in the
energy, materials and industrials sectors, and underweight in
consumer discretionary, financial, telecom and utility stocks.
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