Source: The Canadian Press

The Toronto stock market closed little changed Friday as buoyant mining companies were unable to overcome investor caution ahead of a meeting of G20 finance ministers and central bank governors in South Korea this weekend.

The S&P/TSX composite index inched up 1.95 points to 12,601.18, weighed down by financial stocks, while the TSX Venture Exchange rose 17.38 points to 1,878.23.

The Canadian dollar lost early gains to move down 0.06 of a US cent to 97.38 cents US.

Traders were focused Friday on the upcoming talks in Korea amid rising tensions over a brewing currency battle that could affect global trade.

There are complaints that some countries, like China, are holding their currencies at artificially low levels, giving them an advantage in exporting goods as the global economy slowly recovers from a deep recession.

Hopes for a resolution to the currency issue seemed slim, however.

“I think a lot of people feel that, really, there’s not going to be much in the final communique coming out tomorrow,” said Mark Bayko, portfolio adviser at RBC Dominion Securities.

“Despite the fact we’ve seen U.S. Treasury Secretary Timothy Geithner quoted a number of times in the past couple of days around how countries need to be cautious about their currency and their approach to managing currencies, I think the expectation is (they) aren’t going to deliver anything concrete.”

It’s a far cry from the height of the financial crisis when G20 countries were unanimous in declaring a willingness to do whatever it took to free up financial markets.

But now, said Bayko, “once we seemed to have some more stability in the financial system, it seems like the momentum on that front seemed to disappear. I think currencies is a much more delicate issue, if you will, and it’s more country-specific.”

The financials sector was the weakest component, down almost 1% with CIBC (TSX:CM) down $1.14 at $78.17.

Royal Bank shares lost 55 cents to $55.76 as it announced an agreement to sell its U.S. insurance division to Bermuda-based reinsurer Athene Holding Ltd. for US$628.1 million. Canada’s biggest bank said the sale of Liberty Life Insurance will lead it to book a loss of US$115 million under Canadian generally accepted accounting principles. Royal said it also expects to take a loss of US$405 million under U.S. GAAP.

The base metals sector was ahead almost 1% as the December copper contract on the New York Mercantile Exchange gained two cents to US$3.80 a pound. Equinox Minerals (TSX:EQN) climbed seven cents to $5.78.

The energy sector was slightly higher as the December crude contract on the New York Mercantile Exchange rose $1.13 to US$81.69 after losing almost $2 on Thursday amid a rising greenback. Imperial Oil (TSX:IMO) gained 27 cents to C$39.12 while Suncor Energy (TSX:SU) lost 16 cents to $33.50.

Gold stocks also gained ground with December gold in New York down 50 cents to US$1,325.10 an ounce. Barrick Gold Corp. (TSX:ABX) added 64 cents to C$47.26.

New York markets were mixed amid more positive earnings reports.

Energy services firm Schlumberger Ltd. reported earnings that beat forecasts as land-based drilling activities increased in the U.S. and Canada and its stock rose $3.48 to US$67.79 in New York.

Manufacturer Honeywell International Inc. added 59 cents to US$47.26 as it reported a better than expected profit.

And American Express Co. said after the closing bell Thursday that its profit jumped because of dwindling losses tied to failed loans. Improving credit quality could be a signal that consumers are getting more comfortable with their finances and the worst of a wave of mortgage and loan defaults is over. Amex shares lost $1.24 to US$39.03.

The Dow Jones industrial average dipped 14.01 points to 11,132.56, the Nasdaq composite index gained 19.72 points to 2,479.39 and the S&P 500 index rose 2.82 points to 1,183.08.

Stocks have been buoyed much of this week by a run of positive U.S. corporate earnings statements from the likes of Boeing, McDonald’s and Goldman Sachs.

Sentiment has been also helped by continuing expectations that the U.S. Federal Reserve will pump more money into the U.S. economy after its next policy meeting on Nov. 3.

The TSX finished flat for the week on falling mining and energy stocks and rising financials, while the Dow industrials gained 70 points or 0.63%.

Investors also took in a better than expected reading of Canadian retail sales late in the summer.

Statistics Canada reported that retail sales increased 0.5% in August to C$36.1 billion after flat sales the previous two months. That was better than the 0.1% decline that economists had been expecting.

Meanwhile, Canada’s annual inflation rate rose two-tenths of a point to 1.9% last month as the cost of energy and new cars moved higher. However, the Bank of Canada’s core rate, which measures underlying price pressures by excluding volatile items such as energy, actually fell to 1.5% in September from 1.6% in August.

In other corporate news, Shaw Communications (TSX:SJR.B) reported it had $121.5 million or 28 cents per share of net income in its fiscal fourth quarter, a decrease from $124 million or 29 cents per share in the year-earlier period. Revenue was $939 million, up 8% from the fourth quarter of fiscal 2009.

Shaw also announced that chief executive Jim Shaw will hand over leadership of the business to his brother, Bradley, early next year in an announcement that came on the same day that the CRTC, as expected, approved its $2-billion takeover of Canwest’s TV stations and specialty channels. Shaw shares lost $1.33 to $22.12.

And Lundin Mining Corp. (TSX:LUN) said it’s pleased that the Democratic Republic of Congo has completed its review of the Tenke Fungurume Mining copper-cobalt mining contracts in Katanga province. Lundin’s equity share of TFM will fall to 24% from 24.75% but the company will benefit from increased interest payments on advances. Other key fiscal terms remain unchanged and Lundin shares rose 44 cents to $6.75.