CANADA STOCKS-TSX dips on Syria threat, posts second monthly gain

Fri Aug 30, 2013 5:29pm EDT

* TSX falls 50.83 points, or 0.40 percent, to 12,653.90
    * Index gains 1.3 percent in August
    * Gold-mining, energy shares slip with commodity prices
    * Couche-Tard jumps almost 6 percent after results
    * Bombardier climbs after CSeries gets flight test permit

    By John Tilak
    TORONTO, Aug 30 (Reuters) - Canada's main stock index fell
on Friday as concerns that the United States and its allies
might take military action against Syria hit commodity prices,
offsetting a jump in Alimentation Couche-Tard Inc 
after the retailer reported results.
    The Toronto market climbed 1.3 percent in August, its second
straight monthly gain, outperforming the S&P 500 for the
first time in eight months.
    Couche-Tard's profit more than doubled in its first quarter,
helped by stronger merchandise sales at its convenience stores
in Canada, the United States and Europe. 
    The market digested figures that showed U.S. consumer
spending barely rose in July and inflation was tame. In Canada,
data indicated the economy shifted into lower gear in the second
quarter and contracted in June for the first time in six months.
  
    The United States made clear on Friday it would punish
Syrian President Bashar al-Assad for a recent chemical weapons
attack that it says killed more than 1,400 people.
 
    That capped a volatile week that saw sharp moves in the
prices of gold and oil as investors tried to gauge the
implications of any military action in the highly-sensitive
Middle East.
    "The market psyche will get impacted, but the impact will be
shorter term," said Shailesh Kshatriya, associate director for
client investment strategies at Russell Investments Canada.
    "It's hard to see the U.S. and its allies engaged in this
conflict over the longer term."
    The Toronto Stock Exchange's S&P/TSX composite index
 closed down 50.83 points, or 0.40 percent, at
12,653.90. Seven of the 10 main sectors on the index were in the
red.
    Kshatriya, who expects the TSX to end the year at 12,400,
said recent gains may have been overdone.
    "The equity markets in Canada have gotten a little ahead of
themselves in the near term," he added. "It's difficult to see
sustained momentum in the TSX when you have a situation where
earnings growth is as weak as it is."
    Energy shares gave back 0.8 percent, reflecting a drop in
the oil price.  
    Canadian Natural Resources Ltd lost 1.9 percent to
C$32.14, and Suncor Energy Inc fell 1.1 percent to
C$35.50.
    The materials sector, which includes mining stocks, slipped
0.8 percent, with gold producers leading the decline. The price
of bullion fell 1.3 percent. 
    Barrick Gold Corp stumbled 2.8 percent to C$20.11,
and Goldcorp Inc lost 1.3 percent to C$31.10.
    Financials, the index's most heavily weighted sector, shed
0.2 percent. Royal Bank of Canada was down 0.5 percent
to C$64.90, and Toronto-Dominion Bank fell 0.3 percent
to C$89.62.
    Consumer staples stocks showed the sharpest gain, climbing
1.1 percent. Couche-Tard shares rose 5.9 percent to C$60.74.
    In company news, Bombardier Inc said its CSeries
aircraft received a flight test permit from Transport Canada,
paving the way for the maiden flight of the narrow-body jet. The
stock climbed 1.3 percent to C$4.79.
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