CANADA STOCKS-China data drags TSX to one-week low

Fri Jan 3, 2014 4:45pm EST

* TSX falls 45.34 points, or 0.33 percent, to 13,548.85
    * Six of 10 main sectors decline
    * CP Rail edges higher after entering sale deal

    By John Tilak
    TORONTO, Jan 3 (Reuters) - Canada's main stock index slipped
on Friday to its lowest in a week, with sluggish economic data
from China weighing on investor sentiment and causing declines
in the heavyweight financial, materials and energy sectors.
    A government survey showed that growth in China's services
sector dropped to a four-month low in December as business
expectations fell, adding to figures released earlier this week
indicating weakness in the country's manufacturing industry.
 
    After recording a 9.6 percent gain in 2013, the Toronto
market declined for a second straight session.
    "It's a little bit of a reality check. It probably reflects
some position shifting as we begin the new year," said Elvis
Picardo, strategist and vice president of research at Global
Securities in Vancouver.
    "Despite the weak start to the year, I don't think anything
fundamental has changed in the outlook for equities."
    Investors also paid attention to the U.S. Federal Reserve,
whose monetary stimulus helped fuel global equity markets last
year.
    Ben Bernanke, in what could be his last speech as Fed
chairman, said the U.S. central bank is no less committed to
highly accommodative policy now that it has trimmed its
bond-buying stimulus. 
    "The markets don't want to see aggressive Fed action,"
Picardo said. "A lot depends on what the pace of the scaling
down is going to be going forward."
    The Toronto Stock Exchange's S&P/TSX composite index
 closed down 45.34 points, or 0.33 percent, at
13,548.85, after slipping to 13,521.75, its lowest since Dec.
27.
    Investors realize the need to rethink their expectations at
the start of the year after the TSX's robust performance in
2013, its best since 2010.
    "It's a good reminder that investors should put things in
perspective, make sure that their expectations are appropriately
set," said Craig Fehr, Canadian market strategist at Edward
Jones in St. Louis, Missouri. 
    "A year like 2013 skews what investors should be expecting
from not only equities, but from a balanced portfolio," he
added. "2014 is about readjusting expectations."
    Six of the 10 main sectors on the index were in the red in
the session.
    Energy shares were pulled lower by a drop in the price of
U.S. crude oil. 
    Canadian Natural Resources Ltd lost 0.9 percent to
C$35.03, having the biggest negative influence on the market.
Suncor Energy Inc declined 0.6 percent to C$36.58.
    Financials, the index's most heavily weighted sector, were
down 0.2 percent. Royal Bank of Canada, the country's
biggest lender, gave back 0.3 percent to C$71.39.
    The materials group also stumbled, weighed by a 1.7 percent
drop in Goldcorp Inc.
    In corporate news, Canadian Pacific Railway Ltd said
late on Thursday it would sell the western part of its Dakota,
Minnesota & Eastern Railroad to U.S.-based Genesee & Wyoming Inc
 in a deal worth about $210 million. CP shares edged up
to C$159.45.
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