CANADA STOCKS-TSX closes flat despite late bounce on Congress return

Thu Dec 27, 2012 5:01pm EST

* TSX up 2.97 points, or 0.02 percent, at 12,373.77
    * Financials weigh, but gold miners boost index
    * RIM rises more than 11 percent

    By Allison Martell
    TORONTO, Dec 27 (Reuters) - Canada's main stock index closed
little changed on Thursday, with a gain in the materials sector
offsetting lower financial shares, as investors wavered on
whether the U.S. budget crisis could be resolved by a Dec. 31
deadline.
    The index was negative for much of the day following
pessimistic comments from a top U.S. lawmaker, but recovered
sharply late in the session on news that the House of
Representatives had scheduled a session for Sunday.
    "It's all based on hope, and the hope is that they'll come
to some kind of an agreement," said Fred Ketchen, director of
equity trading at ScotiaMcLeod, on the late rally. "Maybe there
is some middle ground."
    Earlier in the day, U.S. Senate Majority Leader Harry Reid
warned that the country is poised to go off the so-called
"fiscal cliff" if squabbling politicians do not reach a deal.
    The combination of tax hikes and spending cuts will start
taking effect next week if no compromise is reached.
 
    "We are just seeing more and more indications that nothing
is going to happen," said Pat McHugh, Canadian equity strategist
at Manulife Asset Management. "Majority Leader Reid is basically
saying that there isn't enough time to allow for the resolution
of the cliff."
    The Toronto Stock Exchange closed up 2.97 points, or 0.02
percent, at 12,373.77. Volume was relatively thin as the market
reopened after a two-day break for Christmas and Boxing Day.
    The materials sector, which includes miners, rose 1.1
percent, led by gold miners as the metal's spot price rose.    
Barrick Gold Corp, the world's top gold producer, was
the index's most influential gainer, rising 2.2 percent to
C$34.24. Goldcorp Inc rose 1.3 percent to C$35.98. 
    Energy stocks edged up 0.1 percent, along with U.S. crude
futures. 
    But these gains were largely offset by a decline in the
financial sector, which fell 0.5 percent.
    Paul Hand, managing director at RBC Capital Markets, said
bank stocks were weighed down by worries about the fiscal cliff.
    "The market hates uncertainty," he said. "And that's what
this is. They'd almost prefer a bad outcome than no outcome." 
    Toronto Dominion Bank and the Royal Bank of Canada
 were the two most influential decliners, falling 0.9 
percent to C$83.27 and 0.5 percent to C$60.05 respectively.
    Research In Motion Ltd boosted the index as it
climbed 11.7 percent to C$11.43 in Toronto, tracking similar
gains in New York on Wednesday. The bounce followed a sharp
decline last week, when the BlackBerry maker reported earnings.
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