TSX drops on commodity weakness, off two-year high
By John Tilak
TORONTO (Reuters) - Canada's main stock index fell on Monday as weak commodity prices weighed on resource shares, offsetting upbeat sentiment spurred by China's reform plans and by signs of continuing U.S. Federal Reserve support for its stimulus program.
Weakness in gold and oil prices overshadowed a rise in the financial sector and limited gains of a market that hit a two-year high earlier in the session.
With no major news hitting investors' screens over the weekend, the focus remained on Fed Vice Chair Janet Yellen's comments last week that she would support the U.S. central bank's stimulus program and China's indication that it will allow the market to play an influential role in the world's second-biggest economy. Yellen has been nominated to be the Fed's next chief.
Some investors were skeptical about whether the commodities-exporting Toronto market could benefit from China's reforms.
"China is less materials/import-centric as it is a consumer growth story now," said Diana Avigdor, portfolio manager and head of trading at Barometer Capital Management.
"We're still not bullish on materials," she added. "Canada is associated with the commodities market. So it hurts when that doesn't work."
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 24.51 points, or 0.18 percent, at 13,458.06, after touching 13,512.47, its highest level since July 2011.
"A lot of people have reassessed their asset allocation," Avigdor said, noting that Canadian investors were starting to favor stocks over bonds. "There is more confidence in investing in equities." Continued...