TSX down as resource stocks slip on lower commodity prices

Thu Jun 11, 2015 4:56pm EDT
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By Alastair Sharp

TORONTO (Reuters) - Canada's main stock index fell back on Thursday as energy and mining stocks were tripped up by softer commodity prices, with see-sawing action likely to persist as investors fret about Greek debt talks and possible U.S. interest rate hikes.

The International Monetary Fund dramatically raised the stakes in Greece's stalled debt talks on Thursday, announcing that its delegation had left negotiations in Brussels and flown home because of major differences with Athens.

Meanwhile, robust U.S. retail sales data added more evidence of economic recovery in Canada's biggest trade partner, bolstering expectations the Federal Reserve will raise rates this year.

"The market is worried about the Fed raising rates here," said Mario Richard, an investment strategist at Fiera Capital Corp, who predicted more volatility in coming months as investors adjust their assessment about how monetary policy will affect the economy.

"In the very short term, people are not so sure that higher rates will be acceptable and tend to sell cyclical sectors, namely energy, commodities, airlines and stuff like that," he said.

Oil, which is priced in U.S. dollars, fell on the stronger greenback and after a World Bank report forecast the global economy would expand below its 3 percent forecast in January.

Suncor Energy (SU.TO: Quote) was the biggest drag, down 2 percent at C$35.52. Canadian Natural Resources Ltd (CNQ.TO: Quote) stumbled 1 percent to C$36.69. The overall energy group fell 1.1 percent.

The materials group, which includes miners, lost 1.5 percent.   Continued...

A man walks past an old Toronto Stock Exchange (TSX) sign in Toronto, June 23, 2014.  REUTERS/Mark Blinch