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TSX Dips Amid US Fiscal Cliff Anxiety - Canadian Commentary


Canadian stocks were lingering in the red Friday morning as commodities were struggling to move higher, with traders focusing their attention to the developments surrounding the U.S. fiscal cliff negotiations. U.S. President Barack Obama and Republicans are expected to have another round of discussions to break the deadlock on the budget negotiations.

The S&P/TSX Composite Index was down 36.55 points or 0.30 percent to 12,337.22.

The price of crude oil was moving higher Friday morning as traders await cues from the official inventories data. Today during trading hours, the EIA will release its U.S. crude oil inventories report for the weekended December 21. Analysts expect crude oil inventories to decline by 1.9 million barrels and gasoline stocks to gain by 0.5 million barrels last week. Crude for February added $0.20 to $91.07 a barrel

In the oil patch, Niko Resources (NKO.TO) was down 2 percent, while Suncor Energy (SU.TO) was shedding about 1 percent.

The Diversified Materials Index lost about 1 percent, with First Quantum Minerals (FM.TO) and Teck Resources (TCK_B.TO) slipping around 1 percent each.

Meanwhile gold stocks were mixed. The price of gold was moving lower Friday morning as the US dollar was steady versus a basket of currencies amid hopes of US budget talks. Gold for February edged down $7.50 to $1,656.20 an ounce.

Among gold plays, Goldcorp. (G.TO) and Kinross Gold (K.TO) were up around 0.50 percent each, while Barrick Gold (ABX.TO) was slipping 0.25 percent.

Meanwhile, Aeterna Zentaris Inc. (AEZ.TO) jumped 16 percent after it said that it has signed an agreement with the U.S. FDA on a Special Protocol Assessment for an upcoming Phase 3 registration trial in endometrial cancer with its doxorubicin peptide conjugate, AEZS-108.

Equipment leasing and finance company Element Financial Corp. (EFN.TO) announced that it would acquire Nexcap Finance Corporation for about $20 million. The stock was up nearly 1 percent.

In economic news from the U.S., the National Association of Realtors said its pending home sales index rose 1.7 percent to 106.4 in November from a downwardly revised 104.6 in October. Economists had been expecting the index to increase by about 1.8 percent. With the increase, the pending home sales index rose to its highest level since coming in at 111.3 in April of 2010, when sales were boosted by a homebuyer tax credit.

From the euro zone, French consumer spending recorded surprise improvement in November, data from the statistical office Insee showed. The overall consumer spending was up 0.2 percent month-on-month in November, after a revised 0.1 percent fall in the previous month. Economists expected spending to remain unchanged.

A separate report from the Insee showed that the French economy expanded only 0.1 percent in the third quarter from the prior quarter. The third quarter growth was downgraded from 0.2 percent and follows a 0.1 percent fall in the second quarter.

Among a slew of economic reports released from Japan, the consumer price inflation report showed that Japanese core consumer prices fell 0.1 percent year-over-year in November. Core consumer prices for Tokyo considered a leading indicator for Japan declined a steeper 0.5 percent.

by RTTNews Staff Writer

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