CANADA STOCKS-TSX falls as mining shares sink; index up for week

Fri Mar 1, 2013 5:17pm EST

* TSX index down 48.71 points, or 0.38 percent, at 12,773.12
    * Heavyweight banks, energy and mining stocks all weigh
    * Washington gridlock, dismal data add to gloom
    * Atlantic Power skids after dividend cut
    * Magna up after results

    By Alastair Sharp
    TORONTO, March 1 (Reuters) - Canada's main stock index fell
on Friday, as materials and energy shares followed commodity
prices lower, after Washington failed to reach a deal to prevent
U.S. budget cuts.
    There have been widespread fears that the spending cuts will
weaken the economy of the United States, which is Canada's
largest trading partner.
    The materials sector, which includes some of the world's
biggest gold miners, was the largest weight on the index.
Barrick Gold Corp dropped 3.4 percent to C$30.20 as
bullion prices slumped. 
    The energy sector was the next biggest decliner as Brent
crude prices fell to a six-week low, erasing all the gains so
far this year. Financial stocks also fell, just a day after four
of Canada's top banks posted stronger-than-expected quarterly
profits. 
    Royal Bank of Canada slipped 0.4 percent to C$63.77
on Friday, while Toronto-Dominion Bank slipped 0.2
percent to C$85.03. Both remain near record highs.
    "A lot of the major banks, from a pure technical point of
view, are right now at technical resistance," said Keith
Richards, a portfolio manager at ValueTrend Wealth Management.
"Fundamentally, there are not a lot of bargains out there."
    Richards said the stock prices of Canadian banks typically
slip in April or May, and said other factors - such as a high
insider selling ratio and the average length of bull runs -
pointed to a broad decline ahead.
    The Toronto Stock Exchange's S&P/TSX composite index
 ended down 48.71 points, or 0.38 percent, at
12,773.12, with seven of the 10 main sectors in the red. It
gained 0.56 percent for the week.
    
    GLOOMY OUTLOOK
    The U.S. government stumbled toward the massive automatic
spending cuts known as "sequestration," after President Barack
Obama and congressional leaders failed to find an alternative
budget plan. 
    "This scares the market. People are nervous," said Sal
Masionis, a stockbroker at Brant Securities. The negotiations
could drag on for weeks and be an overhang for the market, he
added.
    Investor sentiment was also dampened by weak economic data
from Europe and the political stalemate in Italy. In Canada,
data showed the country's economy grew at a sluggish pace in the
final quarter of 2012 after a similarly disappointing third
quarter. 
    The gloomy economic news weighed on commodity prices and
pulled resource stocks lower. 
    Fertilizer producer Potash Corp fell 1.7 percent to
C$40.68, and Suncor Energy Inc gave back 1.1 percent to
C$30.90.
    Atlantic Power Corp, which generates and sells
electric power to utility companies in Canada and the United
States, fell almost 29 percent to C$7.30 after it slashed its
dividend payout. 
    Magna International Inc bucked the downward trend,
rising 4 percent to C$57.02 after the auto-parts maker reported
a 12.5 percent rise in profit on strong performance at its North
American business.
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