TSX gains, but resource stocks still in funk

Canada's main stock index gained on Friday, but the rise was limited by continued weakness in mining and oil and gas shares. Eight of the 10 main sectors on the Toronto Stock Exchange's S&P/TSX composite index advanced, though advancers barely outnumbered decliners in low-volume trade and the index still notched a 0.2 percent weekly decline as weak crude oil prices weigh.
"Toronto is directionless with a downward bias," said Norman Levine, managing director at Portfolio Management Corp. "It's long overdue and welcome. We've got stuff we want to buy. We're getting closer to when we're going to do that." The index ended up 39.48 points, or 0.28 percent, at 14,277.88, losing momentum as US crude prices hit fresh 6-1/2-year lows before settling barely higher at $42.50 a barrel.
Levine said widely owned Crescent Point Energy Corp's sudden cut to what had been considered an ironclad dividend earlier in the week was weighing on the shares of its peers as investors questioned whether more cuts were to come. "One should be wary of chasing dividend stocks in resource areas because they can't be counted upon in good times and bad like non-cyclical companies," he said.
Crescent Point itself fell 5.4 percent to C$16.64, Cenovus Energy Inc lost 2.5 percent to C$17.74, and Canadian Natural Resources fell 1.5 percent to C$30.50. Oil and gas stocks as a whole retreated 0.6 percent. Another big index drag was Bombardier Inc, which sank 7.5 percent to C$1.35, its lowest level since 1993. Fitch downgraded the plane and train maker was downgraded on Thursday, adding pressure to a company which has faced an uphill battle winning over the aviation industry with its CSeries jetliner.
The hefty financials group climbed 0.6 percent, helped by Royal Bank of Canada's 0.8 percent gain to C$75.97. Bank of Montreal rose 1.1 percent to C$72.93. "Despite the volatility this week, I'm kind of impressed by how well the Canadian market has held together," said Julie Brough, vice president at Morgan Meighen & Associates, noting that most stocks outside natural resources were stable despite the overall rout. A slew of positive economic data from the United States in recent days also helped sooth markets rattled by China's devaluation of the yuan at the start of the week.