TSX falls as golds offset revival of euro hopes

Thu Oct 20, 2011 4:50pm EDT
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By Claire Sibonney

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: Quote) fell 1.6 percent to C$44.94, Agnico Eagle (AEM.TO: Quote) dropped 6.4 percent to C$44.30, and Goldcorp (G.TO: Quote) 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.   Continued...

<p>People walk by a Bay Street sign at the financial district in Toronto, October 10, 2008. REUTERS/Mark Blinch</p>