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TSX Ends A Shade Lower On Gold Mining Stocks - Canadian Commentary

Canadian stocks settled marginally lower Friday, dragged down mostly by gold mining stocks as bullion prices continued to drop. Nonetheless, investors weighed some encouraging data with Germany's business confidence improving more than expected in January and the continued strengthening of the euro after the European Central Bank detailed repayment of its longer-term refinancing operations. The TSX registered a gain of 0.6 percent for the week.

Meanwhile, Canadian inflation came in soft at 0.8 percent in the 12 months to December, well below the economists' expectations for a 1.2 percent increase.

The S&P/TSX Composite Index closed Friday at 12,816.03, down 7.59 points or 0.06 percent. The index touched an intraday high of 12,875.35 and a low of 12,809.66.

The Global Gold Index plunged 2.22 percent, with gold futures for February delivery dropping $13.30 or 0.8 percent to close at $1,656.60 an ounce Friday on the Nymex.

The Capped Materials Index dropped 1.07 percent, even as Potash Corporation of Saskatchewan Inc. (POT.TO) jumped 3.05 percent.

Among gold stocks, Barrick Gold Corp. (ABX.TO) was down 1.32 percent, while Kinross Gold Corp. (K.TO) plunged 4.67 percent. Yamana Gold Inc. (YRI.TO) shed 2.67 percent, while Goldcorp. Inc. (G.TO) dropped 1.59 percent. Iamgold Corp. (IMG.TO) lost 4.09 percent.

The Diversified Metals & Mining Index slipped 0.47 percent, with Teck Resources Limited (TCK.B.TO) down 0.32 percent and Lundin Mining Corp. (LUN.TO) down 0.95 percent. First Quantum Minerals Ltd. (FM.TO) shed 0.05 percent.

The Energy Index gained 0.30 percent, with U.S. crude oil futures for March delivery down $0.07 or 0.1 percent, to close at $95.88 a barrel Friday on the Nymex.

Among energy stocks, Suncor Energy Inc. (SU.TO) moved up 0.70 percent, while Encana Corp. (ECA.TO) up 0.41 percent, and Talisman Energy Inc. (TLM.TO) shed 1.31 percent. Canadian Natural Resources Limited (CNQ.TO) gathered 0.82 percent.

Pacific Rubiales Energy (PRE.TO) was up 3.61 percent after confirming oil discovery at the Karoon blocks, offshore Brazil.

The Financial Index gained 0.10 percent, with TD Bank Group (TD.TO) down 0.08 percent, the Bank of Nova Scotia (BNS.TO) down 0.05 percent, and Bank of Montreal (BMO.TO) up 0.19 percent. Royal Bank of Canada (RY.TO) moved up 0.49 percent.

The Capped Industrials Index dropped 0.20 percent with transportation systems maker Bombardier Inc. (BBD.A.TO, BBD.B.TO) shedding 2.44 percent and Canadian Pacific Railway (CP.TO) down 0.69 percent.

The Information Technology Index shed 0.03 percent, with Blackberry maker Research In Motion (RIM.TO) down 1.07 percent. There were unconfirmed reports that Lenovo Group Ltd is looking at acquisition of RIM in an effort to boost its mobile device business.

In economic news Statistics Canada said the Consumer Price Index (CPI) rose 0.8 percent in the 12 months to December, matching the increase in November. Economists expected an 1.2 percent growth in inflation. However, on a seasonally adjusted monthly basis, the CPI decreased 0.1 percent in December, extending its 0.2 percent dip in November. Meanwhile, the Bank of Canada's core index rose 1.1 percent in the 12 months to December, following a 1.2 percent advance in November.

In economic news from the U.S., a report from the Commerce Department showed new home sales to have dropped 7.3 percent to a seasonally adjusted annual rate of 369,000 in December from the revised November rate of 398,000. Economists expected new home sales to climb to 388,000 from the 377,000 originally reported for the previous month.

From the eurozone, Germany's business confidence improved more than expected in January, reports citing the Ifo Institute showed. The headline business climate index rose to 104.2 in January. The reading was forecast to rise to 103 from 102.4 in November.

Meanwhile, the British economy fell back into contraction in the fourth quarter, following a short-lived recovery in the third quarter, and is on the verge of a triple-dip recession, first estimates released by the Office for National Statistics showed. Gross domestic product declined 0.3 percent sequentially in the fourth quarter, reversing the 0.9 percent growth recorded in the third quarter, which was driven mainly by increased activity during the Olympics. Economists were looking for a more modest decline of 0.1 percent in the final three months of 2012.

by RTT Staff Writer

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