Markets in Toronto were fairly flat Monday, as investors digested the latest tidings from Europe, appearing to have priced in the fallout from a lowering of France’s credit status.
On a day when the S&P TSX Composite Index had more of the spotlight to itself, the index grew but only 27.54 points to close at 12,258.60, off its highs for the day.
The Canadian dollar rose 0.63 cents to 98.24 cents U.S., a day before the Bank of Canada makes its next announcement on interest rates. The central bank is widely expected to keep its key rate at 1%.
The industrials sector led TSX decliners with Bombardier Inc. down six cents to $4.35 while Canadian National Railways gave back $2.15, or 2.8%, to $76.10.
The energy sector gained ground while Imperial Oil gained 64 cents to $45.89 and Suncor Inc. climbed 23 cents to $32.86.
The gold sector was ahead as Barrick Gold Corp. rose 25 cents to $49.69 and Goldcorp Inc. was up 18 cents to $46.63.
The base metals sector lost ground as HudBay Minerals recovered 19 cents to $10.70 but Teck Resources gained 34 cents to $39.69.
Uranium One Inc. shares ran ahead 35 cents, or 14.8%, to $2.72 after it said it has decided to acquire a 13.9% stake in Mantra Resources and extend its purchase option for the company for $150 million U.S. It also said Monday it produced 10.7 million pounds of uranium and sold 9.9 million pounds for 2011.
In other corporate news, Pembina Pipeline Corp. has agreed to purchase all issued and outstanding shares of Provident Energy Ltd. in a transaction valued at $3.2 billion in shares.
The combined company will have a market capitalization of $7.9 billion, making it one of Canada’s largest publicly traded energy infrastructure companies.
Pembina shares lost $1.33, or 4.8%, to $26.57 while Provident shares jumped $1.61, or 16.9%, to $11.12.
WestJet shares were off seven cents to $11.73 as it said it is considering launching a new short-haul regional airline in a move that would extend service to smaller communities and increase traffic to its current network.
Pertaining to the overseas situation, analysts said the S&P downgrades, officially announced Friday after markets closed, had been widely expected, especially in the bond markets.
There was very little shock at S&P's announcement to strip France of its treasured triple-A rating and to cut its view on a raft of other euro countries, including Italy. One bright spot was that Germany, Europe's biggest economy, retained its triple-A rating and had its outlook upgraded to stable from negative.
Also, on Monday, rival ratings agency Moody's says it is maintaining France's top-tier AAA credit rating for now with the outlook stable. S&P rates France's outlook as negative.
A bigger headache for markets at the moment is whether Greece can clinch a deal with its creditors. Last October, Greece's partners in the euro-zone sanctioned a deal whereby Greece's creditors agreed on a deal to reduce the value of their Greek debt holdings so that the country's debt burden is reduced.
The deal with private investors, known as the Private Sector Involvement, or PSI, aims to reduce Greece's debt by $100 billion by swapping private creditors' bonds for new ones with a lower value. It is a key part of a $130-billion international bailout, the second one for Greece.
On the economic front, Statistics Canada reported this morning that November new motor vehicle sales dipped 1.0% to 137,640 units, partially offsetting gains registered in September and October. Sales fell for both trucks and passenger cars.
Elsewhere, the Canadian Real Estate Association reported this morning that national resale housing activity posted a 1.8% increase from November to December 2011, the fourth straight monthly increase. Moreover, annual activity totaled 456,749 sales in 2011, up 2.2% from 2010.
Oil faded in price dipped 12 cents to $99.69 U.S. a barrel.
Gold prices jumped $12.70 to $1,643.50 U.S. an ounce.
ON BAYSTREET
The TSX Venture Exchange gained back 2.90 points to 1,538.93, while the Nasdaq Canada index skidded 5.05 points to 392.83
Nine of the 14 Toronto subgroups were up on the day. Information technology soared 1.6%, while utilities gained 0.8%, and health-care was 0.7% to the good.
The laggards were weighed mostly by industrials, off 1%, global base metal stocks, down 0.3%, and telecoms, sliding 0.1%.
ON WALLSTREET
U.S. markets were closed for the Martin Luther King Day holiday.
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