TSX ends lower as financials, energy issues slide

Thu Jan 26, 2012 4:42pm EST
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By Jennifer Kwan

TORONTO (Reuters) - The TSX fell on Thursday, led lower by financial and energy issues, as Toronto's benchmark index brushed up against a key technical resistance level and investors took a breather following a Fed-inspired bounce the day before.

Financial shares were among the biggest decliners, with Manulife Financial (MFC.TO: Quote) down 5.1 percent at C$11.91, Bank of Nova Scotia (BNS.TO: Quote) off 1.5 percent at C$52.73, and Toronto-Dominion Bank (TD.TO: Quote) down 1.1 percent at C$77.86.

The TSX's overall financial sector dropped 1.7 percent after the U.S. Federal Reserve signaled on Wednesday it would keep interest rates near zero at least until the end of 2014.

The Fed move lifted stock markets and commodity prices globally on the prospect that continued low U.S. rates would stimulate economic growth, but it also heralded continued low rates in Canada, which would cut into bank loan margins.

Energy shares were also key driver on the downside, retreating 0.9 percent with Encana Corp (ECA.TO: Quote) down 4.9 percent at C$19.74.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE, which touched a high of 12,615.99, finished the session down 74.89 points, or 0.6 percent, at 12,464.32.

Eight of its 10 main sectors were lower. On Wednesday, the TSX index rose 144 points.

Sid Mokhtari, market technician and a director of institutional equity research at CIBC World Markets, said the selloff also reflected a pullback from a key technical level of 12,620 points.   Continued...