Canada's S&P/TSX index opened lower this morning, dragged down by sinking energy shares, which was widely anticipated after Canada's rejection of Malaysia's bid for Progress Energy Resources. But the index is peeking into positive territory as the morning progresses, getting help from some uplift in U.S. stocks.
Shares in Progress are down 13 per cent at $18.80. While that's a significant drop, it's not nearly as harsh as the 30 per cent plunge some market watchers were predicting.
Nexen shares are down 6.2 per cent at $23.58 on the TSX. Nexen is particularly vulnerable to a selloff today given that it is subject to a $15.1-billion takeover bid from Chinese oil group CNOOC and may face similar obstacles getting regulatory approval in completing the deal. Its shares had been off as much as 15 per cent in the premarket.
Elsewhere, Celtic Exploration is down 1.1 per cent at $25.90. The company last week received a $2.6-billion takeover offer from Exxon Mobil in a deal that also needs approval from Investment Canada. Encana is down 3.2 per cent at $23.01. Its depressed shares had analysts speculating last week it could become the next takeover target, but those thoughts are now diminished given the rejection of the bid for Progress Energy.
Overall, the TSX energy sector is down just over 1 per cent, and the S&P/TSX index is up 4 points, or 0.03 per cent, at 12,420.
U.S. stocks were also under some light selling pressure after Caterpillar this morning cut its guidance for the year, citing a weak economy. But major stock indexes there are also posting a mild recovery. The S&P 500 is up 1.6 points at 1,434, and the Dow Jones industrial average up 14 points, or 0.1 per cent, at 13,357.