CANADA STOCKS-TSX slips on Fed's stimulus cut, emerging-market fears

Wed Jan 29, 2014 4:41pm EST

Related Topics

* TSX falls 44.56 points, or 0.33 percent, to 13,643.10
    * Seven of 10 main index sectors decline
    * CP Rail climbs after reporting results

    By John Tilak
    TORONTO, Jan 29 (Reuters) - Canada's main stock index
retreated on Wednesday after the U.S. Federal Reserve trimmed
its monetary stimulus program and worries about emerging-market
economies weighed on investor sentiment. 
    The Fed said it was cutting its monthly bond purchases by
another $10 billion, citing an improvement in economic activity
in the United States, even as the crisis in emerging markets
flared. 
    Investors remained concerned about slowing economic growth
and increasing credit risk in China, as well as perceptions of
instability in emerging markets. Doubts about China, coupled
with extreme volatility in the Argentine peso and the Turkish
lira, have raised questions about the risks of investing in
emerging markets.
    The Fed "obviously felt there was nothing in the U.S. data
that would give them cause to pause," said Stephen Wood, chief
market strategist, North America, at Russell Investments. "The
Fed, while it may be easing up on the accelerator, will not be
looking for the brake pedal anytime soon.
    "There's a momentum right now towards a risk-off strategy,
and emerging markets are at the forefront of that global
sentiment," added Wood, who noted the Fed's mandate was a
domestic one.
    The Toronto Stock Exchange's S&P/TSX composite index
 closed down 44.56 points, or 0.33 percent, at
13,643.10. 
    The benchmark index, with its high concentration of resource
shares, lost about 2.5 percent in the last week.
    Despite the selloff, Wood said it would be wise to remain
cautious about natural resource shares as China's economic
growth slows down.
    Seven of the 10 main sectors on the index were in the red on
Wednesday. Financials, the index's most heavily weighted sector,
fell 0.9 percent. 
    Bank of Nova Scotia, which has significant exposure
to emerging markets, with operations in Latin America and Asia,
dropped 0.9 percent to C$61.35. 
    Royal Bank of Canada said it will sell its Jamaican
banking operations to Sagicor Group Jamaica Ltd. RBC
shares slipped 1.1 percent to C$68.77. 
    Shares of energy companies gave back 0.7 percent. Suncor
Energy Inc shed 0.7 percent to C$36.44, and Canadian
Natural Resources Ltd slipped 0.8 percent to C$36.
    Gold-mining shares jumped 3.3 percent, reflecting gains in
the price of bullion. Barrick Gold Corp climbed 4.2
percent to C$21.83.
    In other corporate news, Canadian Pacific Railway 
reported a weaker-than-expected quarterly profit, but it
forecast adjusted earnings would climb at least 30 percent in
2014 on stronger revenue. The stock advanced 4.3 percent to
C$165. 
    Shares of AGF Management Ltd tumbled 6.3 percent,
to C$11.63, after the fund manager posted a
smaller-than-expected fourth-quarter profit as the redemption of
a single legacy account helped trim assets under management by
12.1 percent. The stock was the biggest percentage decliner on
the index.
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