CANADA STOCKS-TSX hits 2-week low on U.S. fears; posts Q3 gain

Mon Sep 30, 2013 5:08pm EDT

Related Topics

* TSX falls 56.89 points, or 0.44 percent, to 12,787.19
    * Index up 5.4 percent in quarter, biggest gain in year
    * Brookfield Office Properties jumps on takeover deal
    * SNC-Lavalin climbs on plans to sell AltaLink stake
    * Petrominerales soars 51 percent on Pacific Rubiales bid

    By John Tilak
    TORONTO, Sept 30 (Reuters) - Canada's main stock index
dropped to its lowest in two weeks on Monday as hopes faded that
a U.S. budget impasse would be resolved in time to prevent a
partial government shutdown.
    But for the third quarter, the Toronto stock market's
benchmark index recorded its biggest quarterly gain in a year,
outperforming the S&P 500 index, Wall Street's benchmark.
    Monday's losses were limited by a 14.2 percent jump in the
shares of Brookfield Office Properties after parent
company Brookfield Property Partners said it will buy
the 49 percent of Brookfield Office it does not already own for
$5 billion in a deal that would consolidate the companies' $45
billion in real estate assets. 
    Dampening investor sentiment was political uncertainty in
Italy, where some senators from Silvio Berlusconi's center-right
party looked ready to form a breakaway group unless the former
premier backed down on his hard line to bring down Italy's
government and head to elections. 
    The U.S. Congress, still in partisan deadlock on Monday over
Republican efforts to halt President Barack Obama's healthcare
reforms, was on the verge of shutting down most of the U.S.
government starting on Tuesday morning. 
    "There is some nervousness as we approach the shutdown
deadline, but there are no signs of panic yet," said Elvis
Picardo, strategist at Global Securities in Vancouver, adding
that the Canadian market is viewing the debt crisis as a U.S.
issue. 
    "Investors believe that there will be a resolution to this
problem," he added. "It may not occur today or tomorrow, but
it's certainly what they're hoping for."
    The Toronto Stock Exchange's S&P/TSX composite index
 closed down 56.89 points, or 0.44 percent, at
12,787.19, after falling s low as 12,734.71, its lowest since
Sept. 16. All of the 10 main sectors on the index were in the
red.
    For the third quarter, the TSX advanced 5.4 percent,
compared with a 4.7 percent gain by the S&P 500. 
    Helped by a rebound in appetite for commodities, the
benchmark Canadian index has been regaining ground lost in the
first half of the year.
    "I doubt if we've seen the highs for the year for the TSX,"
Picardo said. "I still think there are more legs to the rally." 
    Tracking a drop in the price of oil, shares of energy
producers shed 0.5 percent. In the group, Suncor Energy Inc
 was down 1.3 percent at C$36.83, and Canadian Natural
Resources Ltd gave back 0.2 percent to C$32.37.
    Financials, the index's most heavily weighted sector, fell
0.6 percent. Royal Bank of Canada dropped 0.8 percent to
C$66.00.
    But gold-mining stocks eked out a small gain, with Goldcorp
Inc climbing 0.9 percent to C$26.80, and Barrick Gold
Corp adding 0.4 percent to C$19.18.
    SNC-Lavalin Group jumped 2.4 percent to C$42.35
after the engineering and construction company said it was
looking to sell an equity stake in AltaLink, Alberta's largest
regulated electricity transmission company. 
    Shares in Canadian oil company Petrominerales 
soared about 51 percent to C$11.70 after it agreed to be taken
over by Pacific Rubiales, Colombia's largest private
oil producer.
FILED UNDER: