TSX dips as euro zone worries weigh on banks; golds rise

Thu Mar 28, 2013 1:01am EDT
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By John Tilak

TORONTO (Reuters) - Canada's main stock index was little changed on Wednesday, with declines in bank stocks partly offset by a jump in gold miners, as weak economic data from the euro zone and worries about the Cyprus bailout dragged on investor sentiment.

Gold-mining stocks benefited from a jump in the price of bullion, whose appeal as a safe haven tends to increase on negative economic news.

Confidence in the euro zone's economy dropped in March, after four straight months of gains, the European Commission said.

Europe remains mired in recession and has been showing mixed signs of a recovery.

"The situation in Europe represents a short-term risk for the market. The resurgence in those concerns is a source of volatility," said Craig Fehr, Canadian market strategist at Edward Jones in St. Louis, Missouri.

"The near-term risk relates to the confidence in the financial system in Europe and the reverberations around the world," he added.

After securing a bailout deal, Cyprus will reopen its banks on Thursday while limiting withdrawals, banning checks and curbing the use of Cypriot credit cards abroad, among measures imposed to avert a bank run.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE unofficially closed down 6.73 points, or 0.05 percent, at 12,699.65. It earlier fell to 12,622.50, a one-month low.   Continued...

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