* TSX closes up 60.25 points, or 0.47 percent, at 12,847.44
* Banks and energy companies lead gains, miners weigh
By Alastair Sharp
TORONTO, Oct 1 Canada's main stock index ended
higher on Tuesday as investors largely shrugged off a partial
shutdown of the U.S. government, buying into banks, insurers and
energy companies while many of the index's biggest mining stocks
Some of the world's biggest gold miners slumped in line with
a sharp fall in the price of bullion despite the deflationary
risk of the U.S. government reducing its activities and a
looming battle over raising Washington's borrowing limits.
Investors are getting wise to Washington politics and do not
expect the shutdown to last too long, said Keith Richards,
portfolio manager at ValueTrend Wealth Management in Barrie,
And if the shutdown were prolonged, it might encourage the
U.S. Federal Reserve to maintain its stimulus program for a
longer period, which would also boost stocks, he said.
"If there is a longer shutdown it would slow the economy and
therefore reduce the (Fed) taper talk that's been the prevalent
fear out there," Richards said, adding that a looming fight over
raising Washington's borrowing authority was much more
The TSX index ended up 60.25 points, or 0.47 percent, at
12,847.44, its biggest one-day gain since Sept. 18. It had
opened in the red after hitting a two-week low on Monday.
The materials sector was the only one of ten major groupings
Goldcorp Inc and Barrick Gold Corp were the
two heaviest drags on the Toronto Stock Exchange's S&P/TSX
composite index, with Goldcorp off 2.7 percent at
C$26.06 and Barrick falling 3 percent to C$18.60.
The price of gold fell below $1,300 per ounce, to its lowest
since early August, in heavy volume early on Tuesday as
investors saw the U.S. standoff as likely temporary and sold
But the partial U.S. government shutdown and looming
debt-ceiling battle "are all good fodder for gold, so I think it
is a purchase opportunity for gold and gold miners," said John
Ing, president of Maison Placements Canada.
Valeant Pharmaceuticals International Inc had the
single biggest positive impact on the index, up 4 percent at
The index's heavyweight energy sector gained despite a drop
in oil prices. In the group, Talisman Energy Inc jumped
4.9 percent to C$12.40 and Suncor Energy added 0.9
percent to C$37.15.
The financial sector was also higher, with Royal Bank of
Canada gaining 1.1 percent to C$66.71. Bank of Nova
Scotia added 0.8 percent to C$59.45 and insurer
Manulife Financial Corp gained 1.4 percent to C$17.28.
Maison's Ing said that investors will get increasingly
nervous if the shutdown drags on and as an Oct. 17 deadline to
increase the $16.7 trillion U.S. borrowing limit approaches
without agreement in Congress.
"In both the technicals and fundamentals there's a huge
degree of complacency" in the stock market, Ing said. "Just as a
moth flies around a flame and hasn't been burned yet, that
doesn't mean it isn't going to get burned."