CANADA STOCKS-TSX flat with eye on U.S. budget talks; golds weigh

Fri Oct 11, 2013 4:32pm EDT

* TSX edges down 2.30 points, or 0.02 percent, to 12,892.11
    * Five of 10 main sectors advance
    * Potash slips after cut in profit forecast
    * Barrick, Goldcorp weigh the most on market

    By Solarina Ho
    TORONTO, Oct 11 (Reuters) - Canada's main stock index was
little changed on Friday with investors awaiting a resolution by
U.S. lawmakers to end a federal government shutdown and overall
market action muted ahead of the Canadian Thanksgiving long
weekend.
    A drop in gold producers and a decline in Potash Corp of
Saskatchewan Inc, after the fertilizer company cut its
profit forecast for the third quarter, weighed on the market,
offsetting some of the optimism around a possible deal being
reached in Washington. 
    "The TSX is of course adversely affected today by the drop
in precious metals in particular ... you also had that
announcement by Potash pre-warning," said David Baskin,
portfolio manager and president of Baskin Financial Services
    "Add that all up, and that's why Canada is not following the
U.S. uphill."
    After recording its biggest jump in three months in the
previous session, the Toronto Stock Exchange's S&P/TSX composite
index finished the session down 2.30 points, or 0.02
percent, at 12,892.11.
    President Barack Obama and congressional Republican leaders
worked to end their fiscal impasse on Friday but struggled to
strike a deal on the details for a short-term reopening of the
government and an increase in the U.S. debt limit.
 
    Failure to raise the borrowing limit would have serious
repercussions for the fiscal standing of the United States, the
world's biggest economy, and for markets and economies of the
United States and other nations worldwide. 
    Investors, who are also looking ahead to the start of the
earnings session soon, hesitated to make calls until there was
certainty about a resolution to the crisis.
    "We're certainly sitting on the sidelines," said David
Cockfield, managing director and portfolio manager at Northland
Wealth Management. "I just keep my head down for the moment."
    "I want to see some actual results before I make up my mind
how this is going to turn out," he added. "I don't think it's
over until it's over."
    Five of the 10 main sectors on the index were higher Friday.
    The financial sector gained 0.4 percent, with Royal Bank of
Canada climbing 0.5 percent to C$68.03.
    Energy shares added nearly 0.5 percent, with TransCanada
Corp rising 1.2 percent to C$45.33. Encana Corp
 added 2.1 percent to C$18.30. The two companies were
among the most influential movers on the index.
    But weakness in the price of bullion weighed on the
materials sector, which includes mining stocks.
    Gold producers fell more than 3 percent. Barrick Gold Corp
 shed 3.9 percent to C$17.81, and Goldcorp Inc 
fell 3.1 percent to C$24.48. The two stocks had the biggest
negative influence on the market.
    Potash Corp was down 1.6 percent at C$32.46 after it
estimated quarterly profit would be below market expectations as
customers delayed purchases amid market uncertainty.
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