TORONTO (Reuters) - Canada's main stock index recoiled on Monday as investors pocketed some big gains from recent sessions and waited to see if the U.S. Federal Reserve will launch new stimulus measures.
Gold miners fell back after a strong showing in the past week as bullion prices eased from six-month highs. Other miners also retreated after surging late last week on hopes China's infrastructure drive will boost demand for commodities needed to make steel and other construction materials.
"You've had a lot of strong moves in a couple of days and you've probably got some traders taking money off the table in advance of the (U.S. Federal Reserve's) Open Market Committee meeting later this week," said Bob Gorman, chief portfolio strategist at TD Waterhouse.
The Fed is widely expected to take out extra insurance this week against an economic relapse by opting for fresh monetary stimulus.
Such a move would likely help the Toronto index move higher as resource-related stocks gain from steps to kick-start commodity demand, but investors may have already placed all their bets after recent moves in Europe and China to stoke economic growth.
Investors are also awaiting a German court ruling on the constitutionality of the euro zone's new bailout fund and the outcome of Dutch elections. <MKTS/GLOB>
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 52.58 points, or 0.43 percent, at 12,215.43. The index hit a four-month high on Friday after adding more than 300 points in three sessions.
Miners Barrick Gold Corp (ABX.TO) and Goldcorp Inc (G.TO) were the two biggest weights on Monday, down 1.9 percent to C$38.53 and off 2 percent at C$41.21 respectively. Pipeline operator Enbridge Inc (ENB.TO) also pushed lower, down 1.5 percent at C$38.27.
Bucking the trend was Talisman Energy Inc TLM.TO, which jumped 1.6 percent to C$14.09 after the independent oil explorer said its CEO had stepped down, which investors took as a sign the company could be looking for a buyer.
Iron ore posted its biggest one-day gain on record on Monday and China steel futures rose sharply for a second day, supported by hopes Beijing's approval of more than $150 billion in infrastructure projects would resuscitate steel demand.
"Those are massive rallies on the fact that this time China is actually going to do a stimulus that will stick and require commodities," said Barry Schwartz, a portfolio manager at Baskin Financial Services.
But after starting the day in positive territory, diversified miner Teck Resources Ltd TCKb.TO slipped 1 percent to C$29.23 and base metals producer Inmet Mining Corp IMN.TO lost 2 percent to C$48.18. Both had jumped sharply on Friday.
Weak Chinese trade data on Monday underlined the likelihood that Beijing would spend more to deal with the damage done to the world's second largest economy by companies cutting production, inventories and imports in the face of anemic global demand.
Beijing has given the green light to infrastructure projects worth more than $150 billion to resuscitate its steel industry and pull China's economy out of a slowdown.
Shares of Nordion Inc NDN.TO plummeted more than 36 percent to C$6.64 after the provider of medical isotopes suspended its quarterly dividend after an arbitration panel rejected its claim for damages from its main supplier.
"It's an upsetting situation and hopefully they can recover from that," Schwartz said.
Editing by Andrew Hay, Peter Galloway and Phil Berlowitz