TORONTO (Reuters) - Toronto’s main stock index ended lower on Thursday as heavyweight gold miners sold off, but assurances from French and German leaders that a solution to Europe’s debt crisis is in the works helped the index recover from steeper losses earlier in the day.
Commodity shares led the fall as oil and metal prices slipped, with gold miners the most heavily weighted decliners. Barrick Gold (ABX.TO) fell 1.6 percent to C$44.94, Agnico Eagle (AEM.TO) dropped 6.4 percent to C$44.30, and Goldcorp (G.TO) was down 0.7 percent to C$45.01.
“Gold seems to have lost its luster in the last little while in terms of the safe-haven aspect,” said Elvis Picardo, strategist and vice-president of research at Global Securities in Vancouver. “I‘m not sure whether that points to more optimism in the broader economy.”
He added that news on Wednesday that Agnico Eagle is closing its Goldex mine in Quebec also put a big dent in sentiment for the gold sector.
Stocks teetered between losses and gains for most of the session as sensitive markets reacted to a flood of headlines about efforts to deal with the situation in Greece and other debt-laden euro zone countries.
“The market appears prime for a rally but that only will be predicated by something positive coming out of Europe,” Picardo said.
Losses were limited after France and Germany assured markets that European leaders at a summit on Sunday will discuss in detail a comprehensive solution to the euro zone crisis, though no decisions will be adopted before a second meeting is held later in the week.
U.S. data also helped support the market. Factory activity in the Mid-Atlantic region rebounded in October and the number of Americans claiming new jobless benefits fell last week in fresh signs that the U.S. economy is likely to duck a new recession.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended down 19.17 points, or 0.16 percent, at 11,830.33. Five of its 10 main groups were weaker.
Picardo noted minor support for the index around 11,500 and more significant reinforcement around 11,000.
Bank of Nova Scotia (BNS.TO) lost 0.1 percent to C$51.67 after announcing it will pay about $1 billion in cash and stock for a majority stake in Colombia’s Banco Colpatria COL.CN, expanding its footprint in the Latin American country.
“The financials have been stronger. They’re carrying on as if nothing has happened,” said Barry Schwartz, vice president and portfolio manager at Baskin Financial Services. “Look at BNS making a billion-dollar acquisition today, they have excess balance sheets, they’re ready to spend money.”
In Canadian earnings news, Encana Corp’s (ECA.TO) quarterly profit beat expectations, partly on an unexpectedly large tax recovery, but shares in Canada’s largest natural gas producer fell 0.5 percent to C$20.44 as investors remained bearish on the outlook on prices for the fuel.
“They did beat out expectations but everybody knows where oil and natural gas prices have been,” Schwartz said. “They’ve been down in the dumps.”
Reporting by Claire Sibonney; editing by Peter Galloway