TSX dips as Europe woes offset Rogers earnings

Tue Jul 24, 2012 5:40pm EDT
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By Jon Cook

TORONTO (Reuters) - Canadian stocks fell for the third straight session on Tuesday, led by energy and financial shares, as uncertainty about Greece and Spain heightened euro zone debt worries, overshadowing solid earnings from telecoms leader Rogers Communications Inc (RCIb.TO: Quote).

Concerns about the euro zone focused on Spain's high borrowing costs as the country paid the second-highest yield on short-term debt since the 1999 launch of the euro. European Union officials said Greece had little hope of meeting the terms of its bailout.

Weak manufacturing data, the threat of a credit ratings downgrade for Germany and disappointing second-quarter results from Deutsche Bank AG (DBKGn.DE: Quote) added to the euro zone malaise.

"It's Europe, Europe, Europe and it doesn't really matter what the story is right now," said Paul Hand, managing director at RBC Capital Markets.

Nine of Canada's 10 main sectors finished lower. The heavyweight energy complex led losses, falling 1.8 percent a day after rising more than 2 percent in the wake of Nexen Inc's NXY.TO $15-billion takeover offer by China's state-owned oil company CNOOC (0883.HK: Quote).

The Nexen deal - China's richest foreign takeover bid yet - must still be approved by the Canadian government. On Tuesday, Prime Minister Stephen Harper told reporters: "Nobody should prejudge the government's position. This investment will be thoroughly scrutinized before it is either accepted or rejected.

The biggest energy decliners included Canadian Natural Resources (CNQ.TO: Quote), down 3.9 percent to C$27.67, Suncor Energy (SU.TO: Quote), which slid 1.8 percent to C$29.76, Cenovus Energy (CVE.TO: Quote), off 3.5 percent at C$32.10, and Encana Corp (ECA.TO: Quote), down 3.5 percent at C$20.77.

"You had many of them up yesterday, probably unwarranted, in the context of takeovers," said Hand. "There's probably more of a corrective action in the oils."   Continued...

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