The Canadian stock market closed little changed on Monday as uncertainty over whether the United States can avoid the so-called fiscal cliff offset China's encouraging economic data.
The benchmark S&P/TSX Composite index was 5.34 points, or 0.04 percent lower, to 12,191.46 while S&P/TSX Venture Composite index gained 4.54 points, or 0.35 percent, to 1,305.46.
With investors sitting on the sidelines amid skepticism that an agreement can be reached to avoid the fiscal cliff trouble at the end of this year, both Canadian and U.S. markets experienced sharp losses last week despite comments from the Obama administration and congressional leaders about a willingness to compromise. The Toronto Stock Exchange's main index went down almost 1.5 percent while the Dow fell over 2 percent.
Although some traders might not say that the fiscal cliff issue is not new, they were all concerned that if it takes full effect, the spending cuts and tax increases will total at least half a trillion dollars and take a big chunk out of U.S. GDP in 2013. Failure to come up with a compromise would likely pull the U.S. back into recession and drag down other economies along with it.
The fiscal cliff issue refers to a string of tax increases and steep spending cuts aimed at reducing the U.S. deficit and are set to automatically kick in at the start of next year.
However, the Canadian market still got some lift from resource and tech shares on Monday. The base metals and mining sector was up 0.77 percent while copper prices benefited from positive economic data from China, the world's second largest economy, which is viewed as an economic bellwether.
China's industrial output rose 9.6 percent in October, higher than the expected 9.4 percent gain and up from 9.2 percent in September.
The tech sector also lifted the Canadian stock market as Research In Motion,the Blackberry maker,rose 2.9 percent to 8.81 Canadian dollars per share after it said it will officially launch the final version of its long-awaited new BlackBerry 10 operating system and smartphone hardware on Jan. 30. The company will also unveil the first two BlackBerry 10 smartphones. But it's not known when the new devices will be available to consumers.
Currencywise, the Canadian dollar wasn't trading in Canada on Monday as banks were closed in observance of Remembrance Day.