TSX ends up, but pares gains on Spain

Tue May 29, 2012 5:02pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Jon Cook

TORONTO (Reuters) - Canadian stocks finished slightly higher on Tuesday, erasing most earlier gains as gold mining firms slid with bullion prices after a downgrade to Spain's sovereign credit rating rekindled fears about Europe's deepening debt crisis.

Bullion rose in early trade and then fell as the euro tumbled to its lowest level in nearly two years after credit agency Egan-Jones downgraded Spain's rating. U.S. equities temporarily trimmed gains and other commodities dropped.

The heavyweight materials sector, which includes gold miners, sank 1.2 percent. Losses were led by top gold producers Barrick Gold, down 3.2 percent to C$39.74, Goldcorp Inc, off 3.1 percent at C$37.15, and Yamana Gold, which dropped 2.5 percent to C$14.96.

"The market is trying to climb a wall of worry," said Irwin Michael, portfolio manager at ABC Funds, which has $1 billion in assets under management. "People are concerned with the Greek situation spreading and it looks like it might have spread to Spain."

Euro zone debt crisis fears increased after Spanish 10-year borrowing costs neared the 7 percent danger level after the government, struggling to sort out its finances, proposed putting sovereign debt into the struggling lender, Bankia.

Reports that China was planning a new round of stimulus spending to boost lending and growth cheered stock markets and briefly boosted oil prices, which later slipped on the Spain downgrade and Middle East supply worries.

Despite the drag from gold miners, seven of Canada's 10 main sectors finished higher. Oil and gas firms led the gains, up 0.9 percent.

Cenovus Energy climbed 2.2 percent to C$33.11, Suncor Energy was up 1 percent at C$29.19, and Talisman Energy jumped 3.2 percent to C$11.09.   Continued...

A Toronto Stock Exchange (TSX) logo is seen in Toronto November 9, 2007. REUTERS/Mark Blinch