By Jeff Sanford

(October 18 – 18:00 ET) – Paul Martin’s mini-budget didn’t seem to have any impact on Canadian equity markets today. The TSE 300 opened down sharply, began climbing, decided it didn’t like that, and then shuffled off to finish the day down 205.78 points. That puts it back below 10,000 for the first time since June. The composite index closed today at 9,926.78.

The drop was the result of weaker than expected third quarter earnings from IBM, along with growing inflation in the U.S. economy. Surging energy prices pushed the September U.S. CPI numbers higher.

Volume on the TSE was relatively heavy at 141 million shares. Decliners outpaced advancers, 610 to 481. Overall, eight of the 14 sub-indices were also down.

Nortel took the industrial products sector down 4.29%. Communications and conglomerates were also down, both over 2%.

On the upside paper and utilities were up 3.20% and 2.22% respectively.

High flying JDS Uniphase finally saw some value come off today. It dropped 5% on the day. Celestica was up 4.98%.

After climbing on index repositioning yesterday, Alcan gave up some of its gains, settling back 1.28%. Regaining ground lost yesterday were BCE , up 3.36%, and Gulf Canada, up 3.55%.

Franco-Nevada released a press release yesterday claiming it had no explanation for the spike in trading volume. Whatever the reason, it continued today, as the stock was the fourth most heavily traded issue of the day, with over 4 million shares trading. It was up 5.20%.

News that bond holders of Laidlaw had agreed to let its capital restructuring go ahead made it the second most heavily traded stock on the day. It rocketed up 15¢ to 35¢, a gain of 77%.

At the CDNX, trading was heavy on 42.3 million shares. The small-cap exchange closed down 21.94 points at 3,253.88 points.

The budget did seem to have some effect on the loonie, which stopped its week-long slide and rallied just before the end of today’s session. It closed at US66.12¢, compared to US65.80¢ yesterday.

The luke warm IBM earnings shook U.S. markets, which staged a sharp selloff at the open. Markets in New York staged a turnaround later in the morning that the TSE just could seem to muster. The Dow dropped 114.69 points to close at 9,975.02, while the NASDAQ composite dropped 42.40 points to close at 3,171.56. The S&P 500 dropped 7.85 points to close at 1,342.12.