CANADA STOCKS-China data drags TSX to one-week low

 (Adds comments from strategist; updates prices) 
    * TSX falls 45.34 points, or 0.33 percent, to 13,548.85 
    * Six of 10 main sectors decline 
    * CP Rail edges higher after entering sale deal 
 
    By John Tilak 
    TORONTO, Jan 3 (Reuters) - Canada's main stock index slipped 
on Friday to its lowest in a week, with sluggish economic data 
from China weighing on investor sentiment and causing declines 
in the heavyweight financial, materials and energy sectors. 
    A government survey showed that growth in China's services 
sector dropped to a four-month low in December as business 
expectations fell, adding to figures released earlier this week 
indicating weakness in the country's manufacturing industry. 
   
    After recording a 9.6 percent gain in 2013, the Toronto 
market declined for a second straight session. 
    "It's a little bit of a reality check. It probably reflects 
some position shifting as we begin the new year," said Elvis 
Picardo, strategist and vice president of research at Global 
Securities in Vancouver. 
    "Despite the weak start to the year, I don't think anything 
fundamental has changed in the outlook for equities." 
    Investors also paid attention to the U.S. Federal Reserve, 
whose monetary stimulus helped fuel global equity markets last 
year. 
    Ben Bernanke, in what could be his last speech as Fed 
chairman, said the U.S. central bank is no less committed to 
highly accommodative policy now that it has trimmed its 
bond-buying stimulus.    
    "The markets don't want to see aggressive Fed action," 
Picardo said. "A lot depends on what the pace of the scaling 
down is going to be going forward." 
    The Toronto Stock Exchange's S&P/TSX composite index 
   closed down 45.34 points, or 0.33 percent, at 
13,548.85, after slipping to 13,521.75, its lowest since Dec. 
27. 
    Investors realize the need to rethink their expectations at 
the start of the year after the TSX's robust performance in 
2013, its best since 2010. 
    "It's a good reminder that investors should put things in 
perspective, make sure that their expectations are appropriately 
set," said Craig Fehr, Canadian market strategist at Edward 
Jones in St. Louis, Missouri.  
    "A year like 2013 skews what investors should be expecting 
from not only equities, but from a balanced portfolio," he 
added. "2014 is about readjusting expectations." 
    Six of the 10 main sectors on the index were in the red in 
the session. 
    Energy shares were pulled lower by a drop in the price of 
U.S. crude oil   .  
    Canadian Natural Resources Ltd    lost 0.9 percent to 
C$35.03, having the biggest negative influence on the market. 
Suncor Energy Inc    declined 0.6 percent to C$36.58. 
    Financials, the index's most heavily weighted sector, were 
down 0.2 percent. Royal Bank of Canada   , the country's 
biggest lender, gave back 0.3 percent to C$71.39. 
    The materials group also stumbled, weighed by a 1.7 percent 
drop in Goldcorp Inc   . 
    In corporate news, Canadian Pacific Railway Ltd    said 
late on Thursday it would sell the western part of its Dakota, 
Minnesota & Eastern Railroad to U.S.-based Genesee & Wyoming Inc 
   in a deal worth about $210 million. CP shares edged up 
to C$159.45.    
 
 (Editing by Chris Reese and Chizu Nomiyama) 
 ((john.tilak@thomsonreuters.com)(1-416-687-7918)(Reuters 
Messaging: john.tilak.reuters.com@reuters.net)) 
  
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