CANADA STOCKS-TSX slides as mining, energy issues stumble

Fri Apr 26, 2013 5:17pm EDT

* TSX ends down 109.31 points, or 0.9 pct, at 12,220.20
    * Materials down 3.1 percent, energy off 1.1 percent
    * Pace of U.S. growth increases but falls short of
expectations
    * Commodity prices slip on U.S. data

    By Solarina Ho
    TORONTO, April 26 (Reuters) - Canada's main stock market
finished lower on Friday as natural resource stocks slumped and
market sentiment soured following U.S. economic growth data that
fell short of expectations.
    U.S. gross domestic product expanded at a 2.5 percent rate,
an increase from the fourth quarter's dismal 0.4 percent pace
but shy of the 3 percent growth analysts were hoping for. The
weaker-than-expected data in Canada's biggest trading partner
weighed on Canadian stocks.
    The overall materials group, home to mining companies, gave
back 3.1 percent, while the energy group fell 1.1 percent.
Together, the two resource sectors make up some 40 percent of
the index's weight.
    Goldcorp Inc had the biggest negative drag on the
index with its 4.2 percent slide to C$29.29. Barrick Gold Corp
, which reported lower quarterly profits this week, was
down 3.3 percent at C$18.81. Base metal mining company First
Quantum Minerals Ltd plunged 7.4 percent to C$16.67.
    The price of gold, which posted its biggest weekly gain in
three months, finished lower as investors took profits ahead of
the three-day May Day holiday in China. China is the
second-largest gold consumer after India.
    Copper prices retreated on the disappointing U.S. data,
following two days of gains.  
    "A lot of Asia's closed next week, so all the gold guys got
nervous again today," said Paul Hand, managing director at RBC
Capital Markets, who also noted the "outsized influence"
commodities had on the Canadian stock market.
    "I think if you look at the broad mood of the investors in
Canada, the underperformance of the index this year versus the
U.S. and/or some of the global markets is really quiet evident."
    The Toronto Stock Exchange's S&P/TSX composite index
 closed down 109.31 points, or 0.9 percent, at
12,220.20. The index advanced 1.3 percent for the week.
    Eight of the index's 10 key sectors were mired in negative
territory.
    Canadian Natural Resources slipped 2.1 percent to
C$29.58. Oil prices were pressured by caution over the tepid
growth outlook for the world's two largest oil consumers, the
United States and China. 
    "We seem to be in a euphoria and then reality sets in and
the fact is, the commodities continue to be top of mind. Even
though they've recovered ... they can't gain any traction or
momentum or any investor favor," said Barry Schwartz, vice
president and portfolio manager at Baskin Financial Services.
    "No question the market wants to see higher commodity prices
and see them sustained at a higher level, until they get back
in."
    Schwartz said prices of commodity stocks have disconnected
from the underlying commodities they sell.
    "You can't force people to buy them, but some of the
valuations are starting to look very, very attractive," he
added.
    The financial subindex, which make up just over 30 percent
of the main index's weight, was down 0.3 percent, led by Royal
Bank of Canada, which was down 0.8 percent, at C$60.02.
    In corporate results, Transcanada Corp, Canada's
No. 2 pipeline company, reported higher quarterly earnings and
said the long wait for U.S. government approval of its
controversial Keystone XL project will further delay completion
of the pipeline and push its cost above the company's $5.3
billion estimate. Shares fell 1.3 percent to C$49.14.
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