TSX ends lower for third day as metal mining shares decline

TORONTO, April 27 (Reuters) – Canada’s main stock index fell for a third straight day on Monday as metal mining shares lost ground, and despite gains for energy after a deal to buy ARC Resources which could mark a turning point for the sector.

The Toronto Stock Exchange’s S&P/TSX composite index ended down 85.92 points, or 0.3%, at 33,818.19, adding to modest declines on Thursday and Friday.

Shell has agreed to buy energy company ARC Resources in a $16.4 billion deal, paid for mostly with shares, the British firm said. Shares of ARC jumped 21.1% and Kelt Exploration ended up 13.5%, which helped lift the energy sector by 2.3%.

The price of oil settled 2.1% higher at $96.37 a barrel. Peace talks between the U.S. and Iran stalled and shipments through the Strait of Hormuz remained limited, keeping global oil supplies tight.

“To me the ARC thing was the most positive thing we saw today and that should be something that we can build off of,” said Greg Taylor, chief investment officer at PenderFund Capital Management.

“It’s been nearly a decade where foreigners have been selling Canadian assets and if that tide’s turning the other direction then that’s a pretty big thing for Canada.”

Canada will set up a sovereign wealth fund with an initial endowment of C$25 billion ($18.38 billion) to invest in major domestic projects, Prime Minister Mark Carney told reporters one day ahead of a government fiscal update.

Telecom operator Rogers Communications is offering voluntary departure packages to half of its 25,000 employees, the Globe and Mail reported. The company’s shares were up 1.1%.

Seven of 10 major sectors declined, including the materials group, which is home to metal mining shares. It ended 1.1% lower as the price of gold fell.

Consumer discretionary lost 1.7% and consumer staples was down 1%.

(Reporting by Fergal Smith in Toronto and Tharuniyaa Lakshmi in Bengaluru; Editing by Shreya Biswas and Daniel Wallis)

By Fergal Smith