CANADA STOCKS-TSX stumbles as U.S. budget talks weigh

Fri Dec 28, 2012 11:12am EST

* TSX falls 35.96 points, or 0.29 percent, to 12,337.81
    * Eight of 10 main sectors decline
    * Aeterna Zentaris shares soar 20 percent

    By John Tilak
    TORONTO, Dec 28 (Reuters) - Canada's main stock index
slipped on Friday, led by financial and energy stocks, as
uncertainty surrounding U.S. budget discussions dampened
investor sentiment.
    President Barack Obama and lawmakers were launching a
last-chance round of budget talks days before a New Year's
deadline to reach a deal to avoid tax hikes and spending cuts
that could send the country into a recession. 
    "The volumes are quite low, and if you combine that with the
short-term uncertainty of the 'fiscal cliff' in the United
States it's a real recipe for a downward market," said Arthur
Salzer, chief executive of Northland Wealth Management.
    "It's something that's going to be resolved sooner or later.
There's no way around it. But politically it might look good on
the president and on the Congress if they did something over the
weekend before the New Year," he said. 
    The Toronto Stock Exchange's S&P/TSX composite index
 was down 35.96 points, or 0.29 percent, at 12,337.81.
Eight of the 10 main sectors of the index were in the red.
    The financial sector, the index's biggest, was down 0.4
percent. Bank of Nova Scotia was down 0.5 percent at
C$57.63, and Royal Bank of Canada dropped 0.2 percent to
C$59.92.
    Energy stocks slipped 0.3 percent, tracking a decline in oil
prices. 
    Suncor Energy Inc fell 0.7 percent to C$32.38,
playing the biggest role of any single stock in leading the
market lower.
    In company news, Aeterna Zentaris Inc said it was granted a
U.S. FDA assessment for an upcoming cancer trial. The
drugmaker's shares rose 20 percent to C$2.59.
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