TSX falls as Rona bid dropped, Fed elation fades

Mon Sep 17, 2012 5:14pm EDT
 
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By Alastair Sharp

TORONTO (Reuters) - Canada's main stock index fell on Monday, hurt by a drop in shares of retailer Rona Inc RON.TO after a takeover proposal fell through and by fading euphoria over last week's aggressive move by the U.S. Federal Reserve to spur growth.

Shares of home-improvement chain Rona fell 11.6 percent to C$11.29 after Lowe's Cos Inc (LOW.N: Quote) withdrew its C$1.8 billion ($1.86 billion) proposal to bid for the Quebec-based company.

The sharp sell-off made Rona one of the single biggest decliners on the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE.

The index ended the day down 52.61 points, or 0.42 percent, at 12,446.86. Nine of its 10 main sectors fell with the heaviest drops in its financial, mining, and oil and gas sectors.

The fall followed several strong sessions of gains late last week on the back of a new round of stimulus measures by the U.S. Federal Reserve. On Friday, the index hit a five-month high.

"We're taking a breather here, Thursday and Friday were very good days. Nothing goes straight up or straight down," said John Kinsey, portfolio manager at Caldwell Securities.

Some energy stocks were sideswiped by a sharp selloff in the price of crude, which eliminated nearly six days of gains. <O/R>Major producer Suncor Energy Inc (SU.TO: Quote) was down 0.9 percent at C$34.02 -

Others bucked the trend, including smaller Crescent Point Energy Corp (CPG.TO: Quote), which rose 3.9 percent to C$43.74 in a move that Kinsey ascribed to analyst upgrades. Pipeline company Enbridge Inc (ENB.TO: Quote) added 1 percent to C$38.81.   Continued...

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