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CANADA STOCKS-U.S. shutdown pulls TSX lower, but golds gain

cents, weaker than Tuesday’s close of C$1.0325, or 96.85 U.S. cents. The loonie has mostly been trading in a range since early September and analysts expect that to continue for now. There is technical resistance at C$1.0371 and support at C$1.0298, Reitzes said. The shutdown cast uncertainty on two other points of focus for markets: the looming deadline to raise the U.S. debt ceiling and what influence that could have on central bank policy. “It just pushes out any expected … policy tightening of QE tapering in the U.S. and eventual rate hikes in Canada,” said Reitzes. The next big political battle lawmakers face is raising the $16.7 trillion debt ceiling by mid-October. Failure to do so would force the United States to default on some payment obligations and Tuesday’s government shutdown stoked concerns about U.S.

government shutdown shone a spotlight on the U.S. funding impasse, causing declines in almost every single major sector. A day after The Democratic-led U.S. Senate voted to kill Republicans’ latest attempts to modify an emergency government funding bill, hopes that the debt crisis would be resolved soon began to dwindle. The uncertainty spurred a jump in gold, which is seen as a safe-haven asset, as investors placed bets on the commodity. Gold stocks gained about 3 percent. With the shutdown extending to a second day, the market began to be worried about what impact this could have on economic growth and monetary policy. “Reality appears to sinking in that the U.S. government is shut down,” said Irwin Michael, portfolio manager at ABC Funds. “There are still a lot of risks in the marketplace and the economy.” “Investors are very cautious and a little gun-shy, not wanting to do anything until they see a lot of these issues resolved,” he said. The Toronto Stock Exchange’s S&P/TSX composite index was down 30.46 points, or 0.24 percent, at 12,816.98. Michael expects the Canadian index to end the year higher as sentiment for commodities improves. While the Toronto market’s losses were less severe than U.S. stocks, nine of the 10 main sectors on the index were in the red. The financial group fell 0.6 percent.

Canada’s energy industry faces a critical challenge on market access

Pipelines are required in virtually every direction and, at present, the only alternative available is to transport more oil using rail cars,” says Mr. Prentice. He notes that few in Canada saw this infrastructure challenge coming even five years ago. We were secure in knowing we had a steady, stable client to the south that would buy all that we could produce. But with U.S. energy independence nearing reality, Canada needs to make tangible progress toward addressing its infrastructure problem. To continue to grow the industry and build these facilities will require continued foreign investment adds Mr. Prentice. “Because, simply stated, our ambitions and resources exceed our supply of domestic capital.” He notes that over the last five years foreign direct investment has accounted for 26 per cent of the capital injected into Canadian energy projects through M&A activity. But over the past year, in-bound foreign investment in Canadian energy has dropped off dramatically. Foreign investment is down 92 per cent this year at $2 billion , compared with $27 billion in the same period in 2012. Mergers and acquisitions activity in Canadian energy is similarly below historic levels – just $8 billion in 2013, compared with $66 billion in 2012, year to date. To address this, Mr. Prentice believes there needs to be a measure of clarity regarding State-owned Enterprises and foreign investment. ” Canada must make clear to the world that it continues to be open for business.