TSX pares losses on higher oil prices but bank earnings weigh

Wed Feb 24, 2016 5:36pm EST
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By Fergal Smith

TORONTO (Reuters) - Canada's main stock index fell to a one-week low on Wednesday as weaker-than-expected bank earnings dragged down financial stocks, but higher crude oil prices helped pare some of the losses, providing support for energy stocks.

The biggest movers on the index were bank stocks after Royal Bank of Canada (RY.TO: Quote) posted quarterly earnings which fell short of analyst forecasts.

RBC, Canada's second-largest lender by assets, was hurt by weakness in its insurance and capital markets businesses, while it also showed increasing signs of pain from the oil price crash and economic slowdown in Western Canada.

Its stock fell 2.6 percent to C$67.81, and Toronto-Dominion Bank (TD.TO: Quote) declined 1.8 percent to C$51.23. The overall financials group fell 1.6 percent.

"We are starting to see where the loan losses on the oil patch fit in," said John Kinsey, a portfolio manager at Caldwell Securities.

He expects more impaired loans to become loan losses, providing a headwind for the stocks

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE fell 23.17 points, or 0.18 percent, at 12,740.27. It hit its lowest since Feb. 16 at 12,506.05.

Five of the index's 10 main groups ended lower.   Continued...

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