TSX slips as resource stocks weigh; still up 2.7 percent on week
By Alastair Sharp
TORONTO (Reuters) - Canada's main stock index pulled back on Friday as weakness in heavyweight energy and material stocks amid volatile oil price action and a disappointing drop in retail sales tarnished a week of decent gains.
The materials group fell 2.5 percent and energy names lost 1.9 percent, as gold fell toward a six-year low and U.S. oil slumped before short-covering pushed it back above the $40 a barrel level at the settlement. [O/R]
"Technically, oil looks like it is breaking down," said Bryden Teich, associate portfolio manager at Avenue Investment Management. "The forward curve has come in, storage is filling up and people are concerned about supply coming online."
Suncor Energy Inc (SU.TO: Quote), whose strong balance sheet has made it a favorite of fund managers unwilling to completely avoid the sector, fell 1.4 percent to C$36.60.
Pipeline company Enbridge Inc lost 2.2 percent to C$48.52 and Cenovus Energy Inc (CVE.TO: Quote) shed 2.8 percent to C$19.51.
Energy companies account for one-fifth of the Toronto Stock Exchange's S&P/TSX composite index's .GSPTSE weight, while the materials sector, which includes miners and fertilizer producers, accounts for almost 9 percent.
The index closed down 40.34 points, or 0.30 percent, at 13,433.49. It gained 2.7 percent on the week, but investors remain cautious about the prospect of further gains.
"The overall environment doesn't feel great, but we're just trying to find our way through this," Teich said. Continued...