CANADA STOCKS-TSX nears eight-week low as Fed fears deepen

Thu Dec 12, 2013 5:06pm EST

* TSX falls 19.03 points, or 0.14 percent, to 13,114.39
    * Six of 10 main index sectors decline
    * Fortis drops after move to acquire UNS Energy
    * Iamgold tumbles after suspending dividend

    By John Tilak
    TORONTO, Dec 12 (Reuters) - Canada's main stock index
slipped to its lowest in nearly eight weeks on Thursday after
strong economic data from the United States heightened concerns
that the U.S. Federal Reserve might soon begin scaling back its
bond buying program.
    The market also was dragged lower by a 3.7 percent fall in
the shares of Fortis Inc after the company agreed on
Wednesday to acquire Arizona-focused utility UNS Energy Corp
 for about $2.5 billion in cash. 
    A report showed U.S. retail sales rose in November as
Americans bought automobiles and a range of other goods,
contributing to the debate on the stimulus rollback.
 
    Investors have been trying to figure out the implications of
the economic data for the U.S. central bank's next monetary
policy move, and much of the market's focus will be on a Fed
policy meeting next week.
    "The whole issue of Fed tapering has come back to haunt the
market," said Elvis Picardo, strategist and vice president of
research at Global Securities in Vancouver.
    "The market seems to think that the Fed is closer to
tapering than it has been in recent weeks. Until we have a
resolution to this bond tapering, the markets are going to react
in this confused manner."
    The Toronto Stock Exchange's S&P/TSX composite index
 closed down 19.03 points, or 0.14 percent, at
13,114.39, after reaching 13,059.74, its weakest since Oct. 18.
    However, Picardo and other market strategists expect solid
growth in the Canadian benchmark next year, a Reuters poll
found, as the global economic recovery takes hold and boosts the
shares of natural resource companies. 
    Six of the 10 main sectors in the index were in the red on
Thursday.
    Financials, the index's most heavily weighted sector,
slipped 0.4 percent. Bank of Nova Scotia declined 0.4
percent to C$62.96, and Royal Bank of Canada lost 0.5
percent to C$68.12.
    In corporate news, miner Iamgold Corp said on
Wednesday it has suspended its dividend payments until further
notice. The stock fell 10.8 percent to C$3.63 on Thursday.
    With the price of bullion tumbling 2.5 percent, the shares
of gold mining companies also dropped. They reached their lowest
point in about a decade earlier in the session. 
    Eldorado Gold shed 1.2 percent to C$5.95.
    "A lot of the damage to the bullion has already been done,"
said Subodh Kumar, chief investment strategist at Subodh Kumar &
Associates. "But we can't say (gold stocks) have bottomed out as
yet."
FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.