Resources drag TSX lower as market anxiety picks up
By John Tilak
TORONTO (Reuters) - Canada's main stock index declined on Thursday as resource shares slipped with commodity prices amid a broader selloff triggered by concerns about extended valuations and the lack of market catalysts.
Also weighing was a drop in shares of CI Financial Corp (CIX.TO: Quote), a day after Bank of Nova Scotia (BNS.TO: Quote) said it will explore options to divest itself of some or all of its 37 percent stake in asset manager and redeploy the capital elsewhere.
Some investors said that the recent rally, which has seen the Toronto market climb more than 7 percent so far in 2014, could be setting the benchmark up for a pullback.
The market has benefited this year from strong gains in the energy and materials sectors, raising concerns that share prices might be getting extended. The two groups had the biggest negative influence on the market on Thursday.
With the first-quarter earnings season largely over, investors appeared to be searching for catalysts.
"When you have a bit of a data void, when you don't have much to look forward to, that's when the market becomes a little spotty," said Marcus Xu, portfolio manager at MY Capital Management Corp in Vancouver.
"It's a bit of a psychology game. People are looking for excuses to sell," he added. "There is a correction mentality right now, and this could continue for a bit."
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 84.84 points, or 0.58 percent, at 14,588.89. Nine of the 10 main sectors on the index were in the red. Continued...