Nexen deal helps TSX avoid bigger loss

Mon Jul 23, 2012 5:25pm EDT
 
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By Jon Cook

TORONTO (Reuters) - Stocks finished lower on Monday, led by financial and mining shares, as events in Spain threatened to escalate Europe's debt crisis, but a $15.1-billion takeover bid for Nexen Inc NXY.TO boosted energy stocks and helped the index avoid bigger losses.

For the second straight session, fears about Spain rattled equities markets. Spanish media reported on Monday that up to six regions may seek aid from the central government after Valencia asked for funds on Friday, sending the yield on Spanish 10-year debt to a euro-era high of over 7.5 percent.

"There's a degree of fatigue with this whole Europe situation which has been weighing on equity markets for months," said Elvis Picardo, strategist at Global Securities in Vancouver.

Nine of Canada's 10 main sectors fell on Monday. Declines were led by the powerhouse financial services group, which dropped 1.6 percent as investors worried about what a broader Spanish bailout would mean for the global financial system.

Losses were sharpest among the country's largest banks, with Royal Bank of Canada (RY.TO: Quote) falling 1.7 percent to C$51.52, Bank of Nova Scotia (BNS.TO: Quote) down 1.5 percent at C$51.39, and Toronto-Dominion Bank (TD.TO: Quote) dropped 1.2 percent to C$79.05.

Mining stocks also fell sharply, with the heavily weighted materials sector sliding 2 percent as euro zone concerns weighed on the outlook for demand for base metals and gold. <MET/L> <GOL/>

"When it looks as though there will be less demand simply because of falling economic expansion, then I can understand why the prices would be down in the manner in which they are," said Fred Ketchen, director of equity trading at ScotiaMcLeod.

Among the biggest decliners were Barrick Gold (ABX.TO: Quote), which fell 2.3 percent to C$34.13; Goldcorp (G.TO: Quote), down 1.7 percent at C$33.47; Teck Resources TCKb.TO, off 2.6 percent at C$29.80; and First Quantum Minerals (FM.TO: Quote), which tumbled 4 percent to C$17.23.   Continued...

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