TSX retreats on banks, golds despite Canadian Tire surge

Thu May 9, 2013 5:22pm EDT
 
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By John Tilak

TORONTO (Reuters) - Canada's main stock index fell on Thursday as weakness in financial and gold-mining stocks overshadowed a jump in Canadian Tire Corp (CTCa.TO: Quote) after the retailer unveiled plans to launch a real estate investment trust.

Investors also tracked data showing U.S. jobless claims unexpectedly fell in the latest week, dropping to the lowest level in more than five years. That news, coupled with a stronger U.S. dollar, weakened bullion prices and weighed on gold shares. <GOL/>

Thursday's drop pulled the Toronto Stock Exchange's benchmark index off the one-month high it hit in the previous session, and it also ended, as did U.S. stock markets, a five-day winning streak.

"It's not a surprise that there is a pause now; maybe there is some consolidation going on," said Shailesh Kshatriya, senior investment analyst at Russell Investments Canada.

The benchmark S&P/TSX composite index .GSPTSE closed down 41.15 points, or 0.33 percent, at 12,543.90. Six of the 10 main sectors on the index ended higher.

Canadian Tire said it will create a C$3.5 billion ($3.5 billion) REIT through an initial public offering in the fall of 2013, sending its shares up 11.2 percent.

"It's a marvelous time," said John Ing, president of Maison Placements Canada. "There's no question that there is demand, and there is no question that they have lots of real estate."

"There is a desperation for yield," he added. "These chains have been sitting on classic real estate, and they're offering yield in a yield-hungry market."   Continued...

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