CANADA STOCKS-TSX flat as energy losses offset materials gains; US government shutdown looms

By Ragini Mathur

Sept 30 (Reuters) - Canada's main stock index was subdued on Tuesday as losses in energy shares offset materials stocks' gains, while investors weighed the implications of a potential U.S. government shutdown that could disrupt critical economic data releases.

Toronto's S&P/TSX composite index .GSPTSE was down 0.08% at 29917.93 points.

U.S. Vice President JD Vance warned that the government appeared "headed to a shutdown" following stalled budget negotiations between President Donald Trump and the Democratic leadership.

A government closure would delay Friday's crucial U.S. employment report, potentially complicating the Federal Reserve's monetary policy outlook.

Investors were hoping for moderate readings that would preserve rate-cut expectations and sustain the ongoing equity rally.

On the TSX, metal miners .GSPTTMT led the gains with a 0.6% rise as gold prices recovered some losses, after retreating from record highs due to profit taking.

The heavyweight financial sector .SPTTFS also contributed positively, advancing 0.4%.

On the flip side, the energy sector .SPTTEN emerged as the day's biggest decliner, down 1.3%, as oil prices fell in anticipation of another production increase by OPEC+.

However, the benchmark index is poised to close both September and the third quarter with robust gains.

"A big part of the strength of the Canadian market so far has been a couple things - one is the earnings delivery that has been quite strong, especially from some of the largest sectors in the TSX and commodity prices have been quite strong, especially the gold sector," said Josh Sheluk, a portfolio manager at Verecan Capital Management.